RENEWED peace talks between Israel and the Palestinians must tackle core issues including Jerusalem, Middle East envoy Tony Blair has said.

Middle East envoy Tony Blair warned today that the peace process was in jeopardy and Israel must fully support the goal of living next to an independent Palestinian state.

Former British prime minister Tony Blair has won a US$1m (€783,189) international prize for his “exceptional leadership”, it was announced today.

The appointment of George Mitchell as Middle East envoy is an indication that Barack Obama is turning to experience and proven ability to push forward the stalled peace process.

US President Barack Obama is expected to make a number of key appointments and policy announcements during the course of his first day in office.

International pressure was mounting on Israel and the Palestinians today, but the violence showed no sign of abating as the death toll from the bombing blitz rose towards the 300 mark.

One of Tony Blair’s guards accidentally fired his gun at Israel’s Ben-Gurion International Airport today as the former British prime minister was boarding a plane. No one was hurt.

MIDDLE EAST envoy Tony Blair yesterday called off what would have been the first visit of a top Western diplomat to Gaza, after Israel’s Shin Bet security service said he might come under attack there.

The London market closed in the red today after a volatile session amid concerns over the housing market and political tension between Israel and Iran.

International Middle East envoy Tony Blair said today that he believes the Arab and Israeli perspectives on an acceptable permanent peace accord are very similar.

George Bush today predicted that a Middle East peace treaty would be completed by the time he leaves office in 2009.

Donors began committing funds from around the world today for the troubled Palestinian economy amid a renewed international push for a Palestinian state.

Arab leaders and international envoys are preparing for a conference on peace in the Middle East today.

Former prime minister Tony Blair, in his new role as Middle East envoy, today said there was ’a sense of possibility’ in the region.

With formal peacemaking a dim prospect at this volatile time, Israeli Prime Minister Ehud Olmert intends to sound out US President George Bush today about Olmert’s ambitious plan to impose a West Bank settlement on the Palestinians.

Israel’s prime minister Ehud Olmert denied that there was a “humanitarian crisis” in the Gaza Strip, but said Israel would buy medicine and other necessities for the Palestinians to prevent the situation becoming worse.

Russia’s foreign minister said he expects the Palestinian group Hamas to move closer to meeting international demands within two weeks – including setting up foreign aid monitoring and recognising Israel, according to a newspaper interview published today.

Russia’s foreign minister warned Hamas today that the Palestinian militant group must become an essentially political movement whose militant wing could be subsumed into the recognised Palestinian “security structures.”

The US elections are front page news in almost every newspaper in the Middle East.

RELATIONS between the EU and the US have been little short of disastrous at times over the past two years.

ISRAELI troops stormed a Hamas stronghold yesterday and exchanged fire with dozens of masked gunmen in the most intense battle in Gaza in 31 months of fighting. Twelve Palestinians, including two children and a top bombmaker, were killed.

The UN’s top envoy for the Middle East told the Security Council that for the first time since violence broke out in September 2000, Israelis and Palestinians are moving in the direction of peace talks.