Palestinian police and Hamas militants exchanged gunfire in a crowded Gaza City neighbourhood today, and at least nine people were wounded in some of the worst fighting among Palestinians in recent years. Palestinian security forces were placed on high alert throughout Gaza.

Two foreign aid workers, one British and one Austrian, have been kidnapped from the streets of a Palestinian refugee camp in the Gaza Strip, officials said today.

Israel will ask Washington for hundreds of millions of dollars to help foot the bill for next month’s €1.6bn evacuation of the Gaza Strip and four northern West Bank settlements, a senior Israeli official said today.

More than 40,000 soldiers and some 4,000 police are to be deployed in the Gaza Strip to carry out Israel’s evacuation, beginning in mid-August, Israel’s defence minister and police chief said today.

Palestinian militants today killed an Israeli hitchhiker, the third Israeli to be killed in the past five days in a flare-up of violence that threatens a truce reached in February.

An Israeli aircraft today fired at a group of Hamas militants preparing to attack Israeli targets in the southern Gaza Strip, Palestinian witnesses said, further straining a fragile ceasefire and escalating tensions in the region.

Israel’s evacuation of 21 Jewish settlements from the Gaza Strip will begin in mid-August, a month later than planned, Prime Minister Ariel Sharon said today, citing a religious mourning period but raising doubts about Israel’s readiness for the evacuation and even its resolve in carrying it out.

A Palestinian bulldozer today demolished the seaside homes of three senior officers who built illegally on public land in Gaza, the start of what the Palestinian government promises will be a relentless campaign against official corruption.

Israel will hand the West Bank town of Jericho over to Palestinian security control tomorrow, boosting cooperation as moves were underway to get militants to agree a formal truce with Israel.

West Bank militants demanded that Palestinian Interior Minister Nasser Yousef leave their town today, shooting rifles outside a government building to prove their point.

The Palestinian parliament averted a crisis tonight by approving a new 24-member Cabinet dominated by academics after a major move toward long-promised government reform.

The Palestinian parliament today approved a cabinet dominated by professional appointees, including nearly half with doctoral degrees, in a major move toward long-promised government reform.

PALESTINIAN Prime Minister Ahmed Qureia said yesterday that he has formed a cabinet and will present it to parliament for approval later this week, which could clear the way for the resumption of high-level talks with Israel.

Palestinian prime minister Ahmed Qureia announced the formation of a Cabinet today, backing down from a bitter confrontation with Yasser Arafat and leaving the veteran Palestinian leader in firm control of the security forces.

Palestinian Prime Minister Ahmed Qureia and leader Yasser Arafat have agreed on the appointment of an interior minister, a Palestinian official has said.

Israeli forces killed three Palestinians in operations in the Gaza Strip, as the Palestinian leadership crisis intensified, scuttling peace efforts and endangering a donors conference.

PRESIDENT Yasser Arafat extended the term of a Palestinian emergency government yesterday in a sign he expected a power struggle with his prime minister to delay creation of a new cabinet.

YASSER ARAFAT swore in new Palestinian Prime Minister Ahmed Qureia and a skeleton emergency cabinet yesterday in a move likely to make it more difficult for Israel to carry out its threat to “remove” the Palestinian leader.

Yasser Arafat installed a seven-member emergency cabinet with Ahmed Qureia as prime minister, in an apparent move to deflect possible Israeli action against him following a suicide bombing a day earlier.

PALESTINIAN leaders were yesterday locked in a power struggle triggered by Yasser Arafat's attempt to hand control over all the security forces to a loyalist in the apparent hope of sidelining the US-backed Palestinian security chief, officials said.

Palestinian leaders were today locked in a power struggle triggered by Yasser Arafat’s attempt to hand control over all the security forces to a loyalist in apparent hope of sidelining the US-backed Palestinian security chief, officials said.

Palestinian leaders were today locked in a power struggle triggered by Yasser Arafat’s attempt to hand control over all the security forces to a loyalist in apparent hope of sidelining the US-backed Palestinian security chief, officials said.