FORTY years after the Six Day War, peace between Israelis and Palestinians seems as distant as ever.

Hamas gunmen ambushed rival Fatah forces today near a key crossing along the Israeli border, killing eight people in the deadliest battle yet in three days of factional fighting.

The Islamic militant group Hamas today called for new attacks on Israel after eight Palestinians were killed in a surge of fighting over the weekend.

Israeli leaders criticised the new Palestinian unity government today, saying the Hamas-Fatah coalition did not meet international conditions, including recognising the Jewish state’s right to exist.

Little progress was reported tonight from the second summit meeting in a month between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas.

The Palestinian unity government being formed by Hamas and Fatah must clearly state that it recognises Israel, the EU's foreign policy chief Javier Solana said today.

Israeli Prime Minister Ehud Olmert said today that the new Palestinian unity government must “openly and clearly” agree with the demands of the Quartet of Middle East negotiators – adopting past agreements, renouncing terrorism, and recognising Israel.

The rival Hamas and Fatah parties have frozen talks on forming a Palestinian unity government, Fatah officials said – a new setback in efforts to form a more moderate coalition acceptable to the West.

Palestinian president Mahmoud Abbas told the United Nations today that the planned national unity government would recognise Israel.