Israel said today it had paid £50m (€76.2m) in frozen tax funds to the Palestinians and rescinded a contentious decision to authorise a new West Bank settlement, strengthening moderate president Mahmoud Abbas’ hand ahead of crucial weekend talks in Damascus with his Hamas rivals.

Israeli Prime Minister Ariel Sharon today suffered a “significant” stroke with “massive bleeding” in his brain, a hospital official said.

Violence punctuated negotiations to resolve a three-week standoff at the Church of the Nativity in Bethlehem, where Israeli soldiers shot and killed a Palestinian, while Israeli tanks briefly entered the city of Hebron early today.

An Armenian monk was shot and seriously wounded at Bethlehem’s Church of the Nativity compound today. The Israeli army and Palestinians blamed each other for the attack.