Israel and the Palestinian government of President Mahmoud Abbas have resumed security talks after a long break, both sides said today, a new sign of cooperation between Israel and Palestinian moderates after the Islamic militant Hamas took over Gaza.

Israel will begin releasing some of the hundreds of millions of dollars in Palestinian tax money it has frozen for more than a year, in a gesture to the new Palestinian government, Israeli officials said today.

Hamas militants today released a recorded message from captured Israeli soldier Cpl. Gilad Shalit, the first sign of life from the young serviceman since he was abducted exactly one year ago.

THE Israeli cabinet yesterday approved the release of frozen tax funds to Palestinian President Mahmoud Abbas, in a step to bolster the moderate leader in his standoff against the Islamic militant group Hamas.

The Israeli Cabinet today approved the release of frozen tax funds to Palestinian President Mahmoud Abbas, officials said, in a step to bolster the moderate Palestinian leader in his stand off against the Islamic militant group Hamas.

Israel’s Prime Minister Ehud Olmert said he authorised the army to do whatever it takes to halt Palestinian rocket fire, but warned his Cabinet there was no quick solution.

Israeli-Palestinian violence escalated dangerously when Israel killed five militants in airstrikes and hinted Hamas political leaders could be their next target.

Israel pounded the Gaza Strip with airstrikes today, killing five militants and hitting suspected weapons-storage sites in its campaign against Palestinian rocket squads.

Israeli Prime Minister Ehud Olmert remained defiant today, hoping to beat a rising wave of calls to step down after a report criticising his handling of last year’s war with Lebanon.

Allies and opponents today clamoured for Israeli Prime Minister Ehud Olmert’s resignation after scathing criticism from an official commission of his performance during last year’s Lebanon war.

Israel has ruled out a large-scale invasion of Gaza in response to a barrage of rockets from Hamas militants, giving a chance for a largely successful five-month truce to take hold again.

A five-month ceasefire between Israelis and Palestinians in Gaza was threatened when Hamas called for retaliatory attacks after weekend army raids killed nine and moderates called for cutting contacts with Israel.

Palestinian militants from Hamas today called for a fresh wave of attacks against Israel after troops killed nine Palestinians in weekend fighting, straining a five-month old ceasefire.

The rival Hamas and Fatah movements wrapped up months of tortuous coalition talks, saying they would present a national unity government to parliament for approval this weekend.

Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas will meet on Sunday for their second summit in a month, Israeli media reported today.

The supreme leader of Hamas has promised that the militant group will end missile attacks and other violence against Israel, Russian Foreign Minister Sergey Lavrov said today.

Russia will work for international support of the Palestinian Authority power-sharing arrangement and for the lifting of the crippling international aid blockade, the foreign minister said today.

Israel tonight threatened to stop dealing with Palestinian president Mahmoud Abbas, if he goes ahead with plans to join Hamas in a new government, as US Secretary of State Condoleezza Rice and Arab allies sought a way to push forward the stalled peace process.

Disagreements among Israelis and Palestinians over the scope and goal of next week’s summit meeting with US Secretary of State Condoleezza Rice are leaving its prospects in doubt.

Gazans rejoiced in the streets to celebrate a Hamas-Fatah power-sharing deal they hope will avert civil war, but Palestinian officials preached patience today, saying implementing the agreement would be a challenge.

Rival Palestinian leaders have signed an agreement on a power-sharing government in Saudi-brokered talks.

The supreme leader of Iran has called on Islamic nations to retaliate against Israel over excavations being carried out near a hotly disputed holy site in Jerusalem.

Israeli and Palestinian leaders will hold talks in about two weeks in a meeting with US secretary of state Condoleezza Rice, an Israeli official said today.

Israel today installed the first Muslim Cabinet minister in its 58-year history, with parliament approving his appointment by a wide margin.

Jordan’s King Abdullah II told an Israeli newspaper today that his country wants its own nuclear programme.

Israel prime minister Ehud Olmert and defense minister Amir Peretz faced new calls to resign today after Israel’s army chief stepped down, succumbing to widespread outrage over the handling of last summer’s inconclusive war in Lebanon.

Israel will not free Palestinian prisoners ahead of a major Muslim holiday, as it traditionally does, demanding that Palestinian militants first agree to release a captured Israel soldier.

Egypt has sent a large shipment of weapons to the Gaza Strip to shore up embattled Palestinian President Mahmoud Abbas, Israeli security officials said today.

A slip of the tongue by prime minister Ehud Olmert about Israel’s nuclear policy ballooned into a domestic crisis today for the already embattled Israeli leader.

Israeli Prime Minister Ehud Olmert will meet Pope Benedict XVI during a trip to Europe next week.

Rocket and mortar fire threatened a ceasefire aimed at ending five months of deadly Israeli-Palestinian clashes in the Gaza Strip.

The Palestinian prime minister said militants were prepared to stop barraging Israel with rockets if Israel would halt all military action in Palestinian territories.

Israel today promised a punishing response to the first deadly Palestinian rocket attack on the Israeli town of Sderot since the Gaza Strip evacuation last year, even as Palestinian leaders and international envoys pursued diplomatic efforts to spur deadlocked peacemaking.

Israeli prime minister Ehud Olmert said in the NBC interview today that he had no objection to the US negotiating with Iran on the nuclear issue to achieve a peaceful compromise.

Israel’s deputy defence minister today suggested Israel might be forced to launch a military strike against Iran’s nuclear programme – the clearest statement yet of this possibility from a high-ranking Israeli official.

The Israeli Cabinet today voted overwhelmingly to bring into the government a hawkish party that opposes ceding territory to the Palestinians and wants to redraw Israel’s borders to exclude many Israeli Arabs.

Israel has quietly backed off from its plan to assassinate Hezbollah leader Hassan Nasrallah because of the international condemnation that his killing would create, the Israeli daily newspaper Maariv reported today.

President Mahmoud Abbas’ efforts to set up a Palestinian government acceptable to the West suffered a new setback when the prime minister from the Islamic militant Hamas group said he would not lead a coalition that recognised Israel.

President Mahmoud Abbas’ bumpy efforts to set up a Palestinian government acceptable to the West suffered a new setback today, after the prime minister from the Islamic militant group Hamas said he would not lead a coalition that recognises Israel.

Palestinian Cabinet ministers from Hamas handed in their resignations today, a step toward forming a unity government with the moderate Fatah.

Hamas officials today gave Palestinian President Mahmoud Abbas the go-ahead for negotiations with Israel, a major shift in the militant Islamic group’s position toward the Jewish state as it worked to end its international isolation.

ISRAEL lifted its naval blockade of Lebanon yesterday after European warships began patrolling to keep out weapons shipments for Hezbollah guerrillas, the head of the UN peacekeeping force in Lebanon said.

Israeli prime minister Ehud Olmert and British leader Tony Blair will discuss how Israel can proceed with the Palestinians when the two meet in Jerusalem tomorrow, government spokeswoman Miri Eisin said today.

Israel will end its naval blockade of Lebanon within hours, government spokeswoman Miri Eisin said today.