Israel’s hawkish prime minister has backed a Palestinian state beside Israel for the first time amid US pressure.

Former British Prime Minister Tony Blair told the US Congress there was no workable alternative to a two-state solution to the long and bloody conflict between Israel and the Palestinians.

Little progress was reported from the second summit meeting in a month between Israeli prime minister Ehud Olmert and Palestinian president Mahmoud Abbas.

Israel’s new government is drawing up plans to divide the holy city of Jerusalem, according to officials.

Thousands of triumphant Palestinians poured into abandoned Jewish settlements early today, setting buildings on fire, ripping out window frames and shooting in the air.

Israel would incite rage not only among Arabs but also Muslims everywhere by exiling or executing Palestinian leader Yasser Arafat, US Secretary of State Colin Powell warned today.