A ROCKET slammed into an American logistics base yesterday near the city of Balad, killing two US soldiers and wounding 26 people, and saboteurs again blew up a key oil pipeline.

Rockets slammed into a Baghdad hotel used by Western contractors today, shattering windows and blasting a swimming pool.

Security officers shot and killed the Philippines’ former top civil aviation administrator, and a navy reserve officer, who had seized the airport control tower in the capital Manila at gunpoint early today.

Israel has vowed not to negotiate with any new government hand-picked by Yasser Arafat, in the first public warning to those trying to topple beleaguered Palestinian prime minister Mahmoud Abbas.

PALESTINIAN Prime Minister Mahmoud Abbas convened an emergency cabinet meeting yesterday to respond to a Hamas suicide bombing that killed 20 people.

Israel has agreed to hand four more West Bank towns to Palestinian control, a Palestinian official said tonight.

A US-sponsored peace initiative was finally moving forward after Islamic militants agreed to halt attacks on Israelis for three months and Israel said it would pull back forces from the Gaza Strip and Bethlehem.

US and Egyptian mediators intensified efforts to persuade militant Palestinians to agree to suspend attacks against Israelis in a bid to salvage a US-backed peace plan threatening to collapse under the weight of renewed violence.

Israel and the Palestinians are resuming top-level security talks despite a bloody week of bombings and missile strikes that left 60 people dead on both sides, officials said today.

PALESTINIAN Prime Minister Mahmoud Abbas said he was convinced he could reach a truce with Hamas by next week, when he is due to join Israeli Prime Minister Ariel Sharon and US President George W Bush in a three-way summit in Jordan.

Israeli Prime Minister Ariel Sharon met key advisers today as he geared up for crucial talks tomorrow evening with his Palestinian counterpart, the first meeting at that level between the two sides in 31 months.

Israeli troops killed two armed Palestinians disguised as Israeli soldiers today as they tried to infiltrate a Jewish settlement in the Gaza Strip. A third attacker managed to escape.

Israeli premier Ariel Sharon today offered Yasser Arafat a one way ticket into exile as Israeli forces shelled a heavily fortified Palestinian security headquarters.

Israeli troops pulled out of the Bethlehem area early today, Palestinians said, boosting chances for a truce to end nearly 18 months of violence.

Palestinians have cancelled a planned meeting with Israeli security officials.

Israeli attack helicopters struck a Palestinian police post in northern Gaza early today after Palestinians fired mortars at Jewish settlements.

The anthrax strains surfacing with terrifying impact in Florida, New York and Washington are all similar, Bush administration said indicating a single source.

Israel today accepted a US ceasefire proposal aimed at ending eight months of fighting with the Palestinians but appears to have little confidence in its success.

A leading Palestinian suspected of being a bomb mastermind was blown up today when a booby-trapped public phone he regularly used exploded on a West Bank Street.

A retired United States Navy man shot and killed his former girlfriend and her mother in a courthouse car park after a hearing at which he was granted access to his daughter, police said.