ACTING prime minister Ehud Olmert expects to draw Israel’s permanent borders by 2010 and, as part of that effort, will build a controversial settlement outside Jerusalem.

Israel’s acting Prime Minister Ehud Olmert said today that Israel will give up territory and relinquish control over most of the West Bank’s Palestinians, while holding on to main settlement blocs.

ISRAEL killed seven Hamas gunmen in air strikes yesterday in retaliation for a deadly Palestinian rocket attack, resuming its assassination policy against militants as a five-month-old truce appeared to be unravelling.

Israel must withdraw from the Gaza Strip, no matter how well Islamic militants do in Palestinian parliament elections a month before the pullout, Defence Minister Shaul Mofaz said today.

Palestinian leader Mahmoud Abbas has promised to hold a national referendum on any final status agreement with Israel, and criticised Israeli pressure on him to confront militants, the Palestinian government news agency, WAFA, has reported.

An Israeli soldier and a Palestinian fugitive were killed in a West Bank shoot-out today, part of a marked increase in tension in recent weeks despite a three-month-old truce.

WORKERS suspended construction yesterday of a section of Israel's West Bank separation barrier after violent clashes erupted between soldiers and Palestinian demonstrators, Israel Radio reported.

AN Israeli air strike in the West Bank killed a militant leader as Palestinians complained that Israel had confiscated thousands of acres of their land for the most controversial segment of its separation barrier.

PRIME MINISTER Ariel Sharon arrived home yesterday from Washington, facing a tough domestic battle over his "unilateral disengagement" plan despite a boost from his talks with President Bush.

Israeli Prime Minister Ariel Sharon was heading to Washington today to seek US backing for a plan to give up the Gaza Strip and parts of the West Bank in exchange for keeping and expanding five large West Bank settlement blocs.

Charly Wegman, Jerusalem

PRIME MINISTER Ariel Sharon and key Cabinet ministers yesterday considered proposals to move sections of a contentious West Bank security barrier closer to Israel, apparently hoping to deflect growing international criticism.

AN adviser to Prime Minister Ariel Sharon urged Washington yesterday not to meddle in Israeli politics in the latest show of displeasure over planned US talks with authors of a symbolic Middle East peace pact.

THE Israeli Cabinet yesterday approved an extension of a controversial security barrier — dubbed the ‘Iron Curtain’ by Palestinians — that would swing around Jewish settlements deep in the West Bank.

The Israeli Cabinet has approved an extension of a security barrier that would encircle Jewish settlements deep in the West Bank.

The two Palestinian teenage suicide bombers who killed Israelis in separate attacks yesterday lived remarkably parallel lives, but their families said they did not know each other.

Israel has warned the Palestinians that there can be no progress towards peace in the Middle East unless they rein in militant groups, following two suicide bombings in less than an hour.

TWO Palestinian teenagers blew themselves up in twin attacks on a supermarket near Tel Aviv and a Jewish settlement in the West Bank yesterday, killing two Israelis.

Palestinian terror group Hamas ended its six week ceasefire today, claiming responsibility for a suicide bombing at a West Bank Jewish settlement that killed an Israeli.

Twin suicide bombings targeted a supermarket in Israel and a Jewish settlement in the West Bank today, shattering a summer of relative calm since the Palestinian militant groups declared a ceasefire.

Israeli rescue services said the two dead children in today's explosion in the lobby of a hotel popular with Israelis in Mombasa, Kenya were 12 and 13-year-old brothers from the Jewish settlement of Ariel on the West Bank.

A PALESTINIAN suicide bomber blew up at a Jewish settlement yesterday, killing three people, after he was grabbed by two bystanders and shot by Israeli soldiers, police and witnesses said.

A suicide bomber killed himself and two others at an attack near the entrance to a Jewish settlement in the West Bank.

Three people are feared dead in a bomb explosion at a petrol station near the entrance of the Jewish settlement of Ariel in the West Bank, it was reported today.

Israeli soldiers have arrested a 25-year-old Irish citizen during a peaceful protest against the Israeli occupation near the West bank city of Nablus.

IN a carefully planned attack, Palestinian militants dressed as Israeli soldiers ambushed a bus near a Jewish West Bank settlement, then fired on its passengers as they scrambled to escape.

Israeli tanks have fired shells at a Palestinian village in the West Bank after gunmen in the village opened fire on a nearby Jewish settlement.