Israel gave a guarded welcome to a ceasefire proposal for Gaza today raising hopes its bloody 12-day offensive could be winding down.

THE Quartet of Middle East peace mediators sought yesterday to keep alive Israeli-Palestinian peace talks although political uncertainty in Israel has scotched hopes for a deal this year.

In emotional speeches today, Israeli Foreign Minister Tzipi Livni and Palestinian President Mahmoud Abbas pledged to forge a peace between their countries, calling the vision of two states, side by side, the only path.

UN Secretary-General Kofi Annan arrived in Rome today ahead of a conference that will gather top diplomats and officials from key Mideast players in an effort to stop warfare between Israel and Hezbollah guerrillas.

The Bush administration declined to condemn Israel for knocking out electricity and water supplies for most residents of the Gaza Strip in response to the kidnapping of one of its soldiers by Hamas-affiliated militants.