Israel will kill the founder of Hamas, Sheik Ahmed Yassin, in retaliation for a suicide attack on border guards, Israel’s deputy defence minister said in the bluntest warning yet against leaders of the Islamic militant group.

Israel is set to resume targeted killings of top Hamas militants and levelled a blunt warning to the group’s elderly spiritual leader that he tops the list of those to be hunted and put to death.

Italy threw a spanner in the works today just as Israel and the Palestinians agreed to terms for ending the 36 day siege of Bethlehem’s Church of the Nativity.