Israel’s government gathered today to vote on an emotionally charged deal to swap a notorious Lebanese prisoner for two Israeli soldiers captured two years ago – and declared for the first time to be dead.

Israel has agreed to allow Palestinian leader Yasser Arafat to leave his compound to receive medical treatment in the West Bank city of Ramallah, Israeli media reported today.

Israel’s defence minister is to launch a large-scale military operation in the Gaza Strip to stop Palestinian rocket fire on border towns.

Palestinian police were preparing to move back into the West Bank town of Bethlehem today, the second area Israel is turning over under a Middle East peace plan, following an upbeat summit meeting that boosted hope for an end to 33 months of bloodshed.