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King calls creation of Palestinian step a first step toward Arab-Israeli peace. Implied, repatriation of refugees and partition of Jerusalem must follow. MK Hendel (NRP) says impressed by Abdullah’s dedication to peace.  
Peacekeepers do not control Syrian border. Reports indicate Hezbollah plans another offensive against Israel. Syria cooperates with Hezbollah, adopts terrorist tactics for Golans.
Musharaf joined a line of Muslim rulers offering to mediate between Israel and Palestinian Arabs. Musharaf didn’t elaborate whether he will be pressuring Israel to accept millions of Arab refugees or the Palestinians to drop the demand.
Instead of curtailing the running programs, Iran banks on Western corporate interest, invites companies to build nuclear plants. Light-water reactors, commonly deemed peaceful, can produce weapons-grade plutonium if stopped every few months for cleaning. EU will “examine the possibilities.” Austrian company OMV signed $18 bn gas development agreement with Iran.
Moderate mayors are fair game in the Iraqi city US Marines liberated from Islamists.
Ahmed Gheit met Israeli fugitive MK Bishara, indicted for treason and money laundering. Bashara resigns from Knesset. Knesset reacts, cancels Bishara’s free newspaper subscriptions.
Olmert claims Hezbollah “neutralized,” denies reports of it preparing summer offensive. Speaking of Iran, Olmert called sanctions “unprecedented” (assets of 28 people frozen, non-existent Iranian arms exports banned), dismisses Iranian nuclear threat as “apocalyptic predictions.”
Al Aqsa Martyrs Brigade, PIJ, other groups. GOC Southern Command major general Yoav Golant also said, Hamas smuggled over 30 tons of explosives for use against Israel.
Maliki visits Arab countries, seeks support against the Iraqi insurgents
Disturbed by growing cooperation between Hamas and Muslim Brotherhood (Egypt’s major opposition force), Egypt slightly cracks down on Hamas visitors. Palestinian al-Masri was detained at al-Arish airport in Sinai with hundreds of thousands of dollars Hamas collected in Egypt.
Americam Administration offers negotiations, no TV.
after American presidential elections, claims Iran needs weapons-grade uranium and ballistic missiles for peaceful energy programs.
Iraq paints a relatively rosy picture for its foreign sponsors, arrests thousands at random to imitate a crackdown on insurgents.
Iran blames ethnic tensions on American agents who seek to undermine its nuclear capability. Iran boasts to fire “tens of thousands” missiles if attacked, employ terrorists against American and Israelis worldwide.
The law, certain to be vetoed by Bush, provides a loophole for leaving any number of troops after April 1, 2008 for anti-terrorist operations in Iraq.
so as not to provoke IDF’s invasion of Gaza. Egypt doesn’t object to moderate shelling. Palestinian suicide bomber intercepted in Egypt, near Gaza, threw grenade into police officer.
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