Israel and the US are conducting a large-scale missile defence exercise aimed at combining their systems, American and Israeli officials said today, as both countries warn that Iran could obtain nuclear weapons and long-range missiles.

Israel’s new government is drawing up plans to divide the holy city of Jerusalem, according to officials.

Newly-installed Palestinian Foreign Minister Mahmoud Zahar said the United States is biased toward Israel, guilty of crimes against the Muslim and Arab world and is widening the rift between the American people and those of the Middle East.

HAMAS militants have gained ground against Mahmoud Abbas’ ruling Fatah Party in their first legislative run as polls show two movements tied for the lead with the election just a day away.