Israel's new government was to take office today, bringing incoming prime minister Ehud Olmert a step closer to implementing his plan of withdrawing from parts of the West Bank and drawing Israel's borders by 2010.

ACTING Israeli Prime Minister Ehud Olmert's Kadima Party is seeking swift coalition negotiations to carry out its plan to pull out of much of the West Bank and draw Israel's borders by 2010.

Israeli tanks moved into the West Bank town of Hebron from three directions early today, destroying Palestinian police posts during a fierce exchange of fire, witnesses said.

Mortar shells rained down on Israeli villages inside and outside the Gaza Strip overnight, despite two short Israeli incursions into Palestinian-controlled areas.

Israelis and Palestinians have traded mortar fire in the Gaza Strip, while the two sides also held high-level political talks.