US Secretary of State Hillary Clinton sketched out a plan how the US might cope with a nuclear Iran — by arming its allies in the Gulf and extending a “defence umbrella” over the region.

Palestinian and Israeli leaders were sitting down for face-to-face peace talks with George Bush today, as the US president attempted to build on the diplomatic momentum from his Arab summit.

The fate of a ceasefire proposal drawn up by CIA director George Tenet lies in the hands of the Palestinians, says a leading Israeli.