HAMAS edged toward recognition of Israel, a key international demand, in an agreement worked out by Hamas and Fatah leaders in an Israeli prison.

Hamas yesterday edged toward recognition of Israel, a key international demand, in an agreement worked out by Hamas and Fatah leaders in an Israeli prison, mentioning a Palestinian state in the West Bank and Gaza while refusing to renounce violence.

ISRAELI troops demolished three houses of Palestinian terror suspects yesterday, while Jewish settler leaders inaugurated a new Jewish settlement near the Palestinian city of Nablus.