Confrontation between Palestinian factions, sparked by late-July Gaza explosion, continued. Hamas launched operation 2 Aug against predominantly Fatah-linked Hillis clan, killing 10 plus 2 Hamas. Israel 3 Aug allowed some 180 fleeing Hillis clan members to cross border; after Hamas detained some 30 on return, Israel sent others to West Bank. Ceasefire between Hamas and Israel in place, but still only minimal flow of goods into Gaza; Egypt 30 Aug opened Rafah crossing for 2 days before Ramadan. In West Bank, Palestinian Authority (PA) continued crackdown against Hamas, shutting down additional organisations and ordering arrests. Israeli press 13 Aug reported peace proposal by Olmert govt including handover of 93% of West Bank, Israel to annex major settlements ceding Israeli territory equivalent to 5.5% of West Bank, possible limited refugee return – Jerusalem explicitly deferred. PA officials rejected. Israel 25 Aug released 198 Palestinian prisoners, shortly before visit of U.S. Sec State Rice, but continuing settlement activity drew strong criticism. No progress reported in latest meeting between PA President Abbas, Israeli PM Olmert 31 Aug. Israeli leadership uncertain as PM Olmert, facing further corruption allegations in Aug, due to step down after Sept Kadima party elections.

Month-old Israel-Hamas Gaza ceasefire holding but tenuous, while intra-Palestinian tensions increased. Israel reopened borders early July after re-closures following rocket and mortar fire violating truce. Hamas 10 July arrested 3 Palestinians from rival faction for rocket fired in response to killing of Palestinian at border. Goods and fuel into Gaza increased, but UN said supplies still insufficient. Gaza bombs 24-25 July killed 7, including Qassam Brigades members; assailants unknown, but Hamas arrested over 150 Fatah supporters in response. Palestinian Authority (PA) then arrested some 50 Hamas cadres in Ramallah. Egypt briefly opened Rafah border 2-3 July – security forces clashed with hundreds of Palestinians at crossing. Israel launched raids on West Bank businesses, charities accused of Hamas links; Palestinian PM Fayyad 9 July condemned actions. Israel-PA peace talks continued but no visible progress; PM Olmert 28 July said deal by year-end unlikely. Israel completed controversial prisoner swap with Hizbollah 16 July; continued indirect negotiations with Damascus (see Lebanon, Syria). Tensions with Tehran continued to escalate with Iranian missile tests 9-10 July (see Iran). Facing continuing corruption probe, Olmert 30 July announced would resign as PM after Kadima party elections, due 17 Sept.

Israel and Hamas agreed fragile Gaza ceasefire 18 June. Israel opened borders 23 June, re-closed 25 June after Islamic Jihad rocket attack responding to West Bank raid that killed 2; limited reopening 29 June ended after further rocket attacks. Egyptian-mediated agreement provides for cessation of hostilities, opening of crossings, renewed talks on prisoner swap including Israeli soldier Gilad Shalit. Before start of truce rocket killed 1 Israeli 5 June; 12 Palestinians killed 5-16 June; 6 militants dead 19 June. Palestinian Authority President Abbas welcomed ceasefire, following 4 June call for renewed dialogue with Hamas and 8-9 June Senegal-hosted talks. Olmert, Abbas continued peace talks, meeting 2 June. U.S. Sec. State Rice in 15 June visit; French President Sarkozy in 23 June visit called for end to Israeli settlements. Olmert under pressure in corruption probe, agreed 25 June to leadership elections for Kadima party by Sept, avoiding threatened dissolution of parliament. Earlier month Olmert accelerated mediation efforts with northern neighbours (see Syria, Lebanon), upped tensions with Tehran – early June military exercise reportedly dry-run for attack on Iranian nuclear facilities.

Cairo-mediated Gaza ceasefire negotiations continued: some progress. Israel accepted in principle Egyptian proposal – synchronised mutual ceasefire; opening crossings on terms acceptable to Israel, Hamas, Palestinian Authority (PA); prisoner exchange. Hamas agreed no extension to West Bank for now. Israel demanded exchange include kidnapped soldier Gilad Shalit. Israeli incursions, airstrikes in Gaza continued: at least 14 Palestinians, including civilians, killed. Palestinian rocket fire ongoing: Israeli civilian killed 10 May, another 12 May; over 70 reported injured in Ahkelon shopping mall strike 14 May. Black-outs followed further Israel fuel curbs early May; deliveries resumed 12 May. West Bank: some 600 additional PA security personnel deployed Jenin 3 May; Israel said 70 roadblocks removed May, but UN reported increase from Sept to Apr. U.S. President Bush in Jerusalem 14 May for Israel’s 60th anniversary celebration; met PA President Abbas in Egypt 17 May; no visible progress on peace talks. Further corruption probe involving PM Olmert’s past financial dealings stepped up. Defence minister Ehud Barak 28 May called for PM to leave office; FM Tzipi Livni 29 May said Kadima party must prepare for “any scenario, including early elections”.

Tensions and violence again intensified in Gaza, but ceasefire mediation efforts continue. Cross-border attack on Nahal Oz fuel depot 9 Apr killed 2 Israelis, at least 7 Palestinians. Israeli tanks and bulldozers sent 11 Apr near Bureij refugee camp: at least 4 teenagers dead. Further clashes in vicinity 16 Apr killed 3 Israeli soldiers – fierce retaliation same day left 22 Palestinians dead, including 5 children and Reuters cameraman. Hamas breached border in armoured vehicle 19 Apr. Israel cut fuel supplies, seriously disrupting food distribution. Mother, 4 children killed 28 Apr after Israeli airstrike – army investigating. Yet both sides continued support for Cairo’s ceasefire mediation efforts. Hamas 25 Apr offered 6-month “period of quiet” in Gaza first, later West Bank; Israel dismissed. 12 other Palestinian factions 30 Apr agreed in principle to ceasefire. Former U.S. President Carter 19 Apr met exiled Hamas leader Meshaal in Damascus, deputy Israeli PM Yishai in Israel. Talks between Palestinian Authority (PA) and Israel continued: U.S. President Bush scheduled to visit mid-May. Israel agreed to PA opening 20 police stations in rural areas of West Bank, following March agreement on Jenin deployment. Israel staged 5-day civil defence drill early Apr amid increased tensions with Syria, Lebanon.

5-day Israeli aerial and ground assault in Gaza ended 3 March: at least 110 Palestinians, 2 Israeli soldiers dead. Major NGOs called humanitarian situation worst since 1967; UN condemned Israel’s “disproportionate use of force”. Palestinian President Mahmoud Abbas suspended participation in peace talks; reversed decision during early- March visit by U.S. Sec. State Rice. In second visit 31 March, Rice said process “moving in right direction”; U.S. said 30 March Israel to reduce West Bank roadblocks, allow 500 Palestinian Authority security forces to deploy in Jenin. Israel 31 March announced further settlement activity in Jerusalem, West Bank. Egypt moved to mediate Gaza ceasefire; efforts continuing. Palestinian resident of Jerusalem shot 8 students in Jewish seminary 6 March. Israeli operation in Bethlehem 12 March killed 4 militants; rocket barrage from Gaza followed. Yemeni initiative to reconcile Hamas and Fatah collapsed. U.S. VP Cheney held separate talks with PM Olmert and Abbas 23-24 March; accused Hamas of “torpedoing” peace process. Russia renewed proposal to host Moscow talks in May: potential focus on Syria-Israel. Arab League statement at Damascus summit (see Syria) said continued offer of 2002 Arab peace initiative tied to Israel executing commitments.

Violence escalated significantly. At month end: 27 Feb Israeli airstrike killed 5 Hamas in Gaza; responding rocket barrage same day killed Israeli man in Sderot – first civilian death from rocket attack since June. In following 3 days, Hamas fired rockets, including into Ashkelon, and Israel intensified Gaza operations, killing some 60 on 1 March, at least half civilians. Total killed 27 Feb-1 March near 100, including 3 dead in raid on refugee camp near Nablus (West Bank) and 2 Israeli soldiers. Earlier in month: Israeli woman killed in 4 Feb suicide bombing in Dimona (Negev) – first in over 1 year 2 bombers dead; Hamas claimed responsibility. Israel stepped up operations: killed at least 7 Hamas 5 Feb; further 6 militants, 1 civilian dead 7 Feb; 5 dead in 17 Feb raid – some 80 detained. Scores of rockets and mortars fired from Gaza into southern Israel: 2 youths seriously wounded 9 Feb. Egypt resealed Gaza border 3 Feb, 12 days after Palestinians breached barrier under tightened Israeli blockade. Several injured, 1 killed in clashes between Hamas and Egyptian border guards. Hamas in Cairo meetings to discuss border control. Egyptian officials said 1 Feb 15 Palestinians armed with explosives detained in Sinai. East Jerusalem settlement expansion plans again announced 12 Feb. Israel rejected accusations of involvement in 12 Feb assassination of Hizbollah commander in Damascus: on high alert following retaliation threats (see Lebanon, Syria). Israeli PM Ehud Olmert and Palestinian Authority leader Mahmoud Abbas held talks 19 Feb. UN humanitarian chief “shocked” by Gaza situation; called for opening Israeli crossings, end to Palestinian rocket attacks.

Under tight blockade, Palestinians destroyed large sections of Gaza-Egypt border wall 23 Jan. Hundreds of thousands crossed to buy food, supplies. Egypt working with Hamas to restore order (see Egypt); held talks in Cairo with Palestinian President Abbas 30 Jan and Hamas 31 Jan; both want role in border control. Breach followed 17 Jan Israeli closure of crossings; 20 Jan shutdown of Gaza power plant; continued rocket firing into Israel and Israeli attacks on militants – some 65 Gazans, including son of senior Hamas leader Mahmoud Zahar, killed in first 3 weeks of month. U.S. President Bush in Jerusalem, West Bank for separate talks with Israeli PM Ehud Olmert and Abbas 9-10 Jan; called for “end to occupation”, criticised recent settlement plans. Israeli and Palestinian Authority negotiators began talks 14 Jan. Israeli raids/rockets killed Islamic Jihad leader Walid Obeidi in West Bank 16 Jan; at least 4 Hamas fighters in Rafah 24-25 Jan. Israeli policeman killed at East Jerusalem checkpoint 24 Jan. Abbas, Olmert met 27 Jan. Hardline party Israel Our Home left coalition government 16 Jan; religious Shas party threatened same 27 Jan. Final report of Winograd Commission investigating 2006 Lebanon conflict released 30 Jan; found “serious failings” but refrained from holding Olmert personally responsible.

Peace efforts slowed but continuing since November Annapolis summit – violence in Gaza up. 11 December IDF launched deepest incursion since June Hamas takeover; cut main artery linking southern Gaza to centre and north. Rocket barrage on Israeli communities near border intensified. Israeli airstrikes and raids into Gaza throughout month killed dozens including Islamic Jihad leaders Majed Harazin and Mohammed Abdullah. Hamas renewed ceasefire offer mid-month; publicly rejected by Israel. Fighting between Fatah and Hamas supporters broke out in Gaza 31 December, killing at least 8. Israel and Egypt slightly eased ban on movement of goods and people, including hajj pilgrims, out of Gaza; increased fuel supplies. New East Jerusalem settlement initiatives announced early month; condemned by U.S. and EU. Olmert and Abbas met 27 December: Palestinian negotiator said parties agreed not to prejudice final settlement issues. Donors in Paris 17 December pledged over $7 billion over 3 years to Abbas government – portion previously pledged. Over 150,000 in Gaza 15 December to mark 20th anniversary of Hamas founding; government banned displays in West Bank.

Annapolis meeting 27 November concluded with statement parties will strive to negotiate peace treaty by end 2008. 16 Arab nations, including Saudi Arabia and Syria, attended. U.S. to monitor progress: appointed former NATO commander James Jones as liaison 28 November. Dutch diplomat Robert H. Serry named UN Mideast envoy 29 November. Expectations for meeting sharply downgraded in lead-up: Israeli FM Tzipi Livni insisted Palestinians recognise Israel as “Jewish state” – implicitly demanding relinquishment of right of return and outraging Israel’s Arab citizens. Hamas leaders denounced Abbas; movement said decisions taken at Annapolis not binding. Israeli army continued raids into West Bank; Palestinian Authority (PA) deployed 300 additional security personnel in Nablus, but said cannot be effective with ongoing Israeli operations. Hamas’s West Bank branch sent delegation to meet and pray with Abbas: move followed rise in tensions, as Hamas forces killed 8 Fatah supporters 12 November at rally commemorating Yasser Arafat’s death. Abbas called to “bring down” Hamas 15 November. Israeli airstrikes killed 11 in Gaza since 27 November; 2 in north mid-month; 4 in south 31 October. Anti-Annapolis demonstrations in West Bank 27 November forcefully dispersed by PA: 1 dead, many wounded; parallel demonstration in Gaza passed peacefully.