Monday, June 30, 2008

FRANCE TAKES OVER EU PRESIDENCY

Israel authorities warn hospitals to prepare for earthquake Mon Jun 30, 3:04 PM ET

JERUSALEM (AFP) - A strong earthquake could soon rock Lebanon and parts of Israel, authorities said on Monday, urging health officials in northern Israel to make preparations for such an event. The probability of an earthquake of a magnitude of up to six on the Richter scale, originating in Lebanon and being felt in Israel has increased, the health ministry said in a letter sent to medical officials in northern Israel.Since February, abnormal seismic activity has been noted in southern Lebanon, which had suffered some 500 minor earthquakes in a three-month period, health ministry director-general Avi Yisraeli said in the letter.In May, the tremors have become more intense and were felt in northern Israel, he said adding that should an earthquake of such magnitude hit northern Israel, it may cause substantial infrastructural damage in the area.All medical facilities and organisations must do everything they can to enhance the level of readiness, Yisraeli said in the letter published by the ministry on Monday.

Similar concern was issued by Lebanon's national scientific research centre.The secretary general of the centre, Moueen Hamz, told AFP in Beirut that 800 tremors ranging in magnitude from 2.3-5.1 degrees on the Richter scale had shaken the south Lebanon regions of Tyre and Nabatiyeh since February 12.The tremors increased significantly in May and June, he said, urging the Lebanese authorities to take serious prevention measures.Experts in Lebanon expect a quake of between five and six degrees on the Richter scale to strike, like the tremor that shook Lebanon in 1956 killing 136 people and destroying 6,000 houses, Hamze said.Some seismologists in Israel say that quakes have historically rocked the region every eight decades, and the last one was nearly 81 years ago.About 300 people were killed in Jerusalem and nearby Jericho by the July 11, 1927 temblor.A similar quake measuring seven on the Richter scale and with an epicentre in the Hula Valley, today in northern Israel, devastated the town of Safed and killed some 4,000 people in 1837.

Rocket lands in Israel, straining Gaza truce Mon Jun 30, 4:48 PM ET

JERUSALEM (Reuters) - A rocket fired from the Hamas-controlled Gaza Strip landed in southern Israel on Monday, putting further strain on a ceasefire brokered by Egypt. An Israeli police spokesman said the makeshift rocket had landed near a kibbutz bordering the coastal enclave, causing no damage or injuries.There was no immediate claim of responsibility for what was the fourth such attack since the truce went into effect on June 19.A Palestinian official who coordinates with Israeli authorities the passage of goods into the Gaza Strip said they informed him that Israel's border crossings with the territory would be closed on Tuesday in response to the rocket strike.On Sunday, Israel reopened three of its crossings with the Gaza Strip after cross-border rocket fire stopped.Israel had shut the crossings on June 25 after an Islamic Jihad rocket salvo which the Palestinian faction said was in retaliation for Israel's killing of one of its leaders in the West Bank.Other Gaza militants have also fired a rocket and two mortar bombs in two separate incidents.

The Egyptian-brokered ceasefire requires militant groups to halt rocket fire in return for Israel gradually easing its blockade of the impoverished territory.Israel sharply cut back the supply of goods into the Gaza Strip a year ago, after the Islamic militant group Hamas took over the territory from forces loyal to President Mahmoud Abbas's more secular Fatah faction.(Reporting by Nidal al-Mughrabi; Writing by Joseph Nasr; Editing by Richard Williams)

JULY 1 FRANCE TAKES OVER EU PRESIDENCY
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Sarkozy combative as France assumes EU presidency By JOHN LEICESTER, Associated Press Writer Mon Jun 30, 5:36 PM ET

PARIS - President Nicolas Sarkozy was in combative mood Monday as France assumed leadership of the European Union, criticizing the bloc's trade chief and warning Europe's central bank against raising interest rates. Some analysts have questioned whether Sarkozy's sometimes brash and often direct style will be suited to the task of building consensus among the EU's 27 member nations as France holds the rotating presidency for the next six months.The EU is facing formidable problems in high oil prices, the threat to overseas sales from the euro's strength against the U.S. dollar and uncertainty about the bloc's future after Ireland's voters rejected a reform treaty this month.In a TV interview, Sarkozy reiterated France's priorities during its half-year at the helm would be stemming the influx of illegal immigrants, combatting global warming and softening the blow of oil prices. He said Europeans also want the EU to deal with threats posed by globalization.The European idea will be in danger if we don't protect Europeans, Sarkozy said.One of Sarkozy's long-standing complaints is that the EU's euro currency is overvalued, hurting European economic competitiveness in global trade.The European Central Bank is widely expected to raise its interest rates this week amid high inflation in the euro zone — a move that could send the currency even higher against the dollar.Sarkozy said raising interest rates would prevent people and companies from borrowing and investing. He blamed inflation on rising prices for commodities like oil and said doubling or even tripling interest rates would not bring oil prices down.

Don't tell me that to fight inflation, we must raise interest rates, he said.Sarkozy indicated that he, like his predecessor as French president, Jacques Chirac, would be a strong defender of European farmers.He accused the EU's trade chief, Peter Mandelson, and the head of the World Trade Organization of pushing trade proposals that Sarkozy said would lead to a 20 percent drop in European agricultural production and a 10 percent cut in its agricultural exports.That is 100,000 jobs lost. I will not let that happen, Sarkozy said.Irish voters' rejection of the EU reform treaty June 13 has cast a pall over France's EU presidency. The treaty can only take effect in 2009 only if ratified by all 27 EU states.The treaty, which took years to draft, aims to streamline the way the bloc makes decisions and bolster its powers in such areas as immigration and fighting crime. It also seeks to make the EU's foreign policy more effective with the creation of an EU president and single envoy to represent the bloc abroad.

FM wishes Syria did have nuclear programme Mon Jun 30, 4:21 PM ET

DAMASCUS (AFP) - Syrian Foreign Minister Walid Muallem said on Monday that his country had no nuclear programme but that he wished that it did in the face of Israel's undeclared nuclear arsenal. Muallem was speaking a week after a UN team inspected a desert facility in northeastern Syria that Israel bombed last year and which the United States says was a nuclear reactor being built with North Korean help and nearing completion.I speak as a Syrian citizen. If Syria had such a secret programme it would not have allowed them (the UN inspectors) to visit that site, Muallem told a joint news conference with visiting Norwegian counterpart Jonas Gahr Stoere.But as a Syrian citizen I would have wanted Syria to have such a programme because Israel has made huge strides in making nuclear bombs, Muallem added.A team from the International Atomic Energy Agency made a three-day trip to Syria last week during which it visited the Al-Kibar site at the centre of the US allegations.Syria has acknowledged that the facility was a military one but says it was disused.The UN watchdog's deputy director general Olli Heinonen who led the three-member team said the probe got off to a good start.We achieved what we wanted on this first trip. We took samples which we wanted to take. Now it's time to analyse them, Heinonen told reporters on his return to the watchdog's headquarters in Vienna on Wednesday.

Israeli defence minister to meet Palestinian leader Mon Jun 30, 3:49PM ET

JERUSALEM (AFP) - Israeli Defence Minister Ehud Barak is due to meet Palestinian president Mahmud Abbas on Tuesday in Greece, a statement from his office said. The meeting in the Greek capital, Athens, will be held on the sidelines of a meeting of Socialist International, the statement said.Israel and the Palestinians revived negotiations toward resolving core problems like the status of Jerusalem, the borders of a future Palestinian state and refugees at US-hosted talks last November.But no concrete progress has yet been announced.Israeli and Palestinian negotiators are due to meet in the United States in July, senior Palestinian negotiator Saeb Erakat said last week.

Hamas emboldened by Israel-Hezbollah prisoner swap By IBRAHIM BARZAK, Associated Press Writer Mon Jun 30, 3:37 PM ET

GAZA CITY, Gaza Strip - Hamas militants holding an Israeli soldier said Monday they would stick to their tough demands in negotiations over his release, emboldened by the high price Israel is paying in a planned prisoner swap with Hezbollah. The declaration could complicate Israel's efforts to bring Sgt. Gilad Schalit home after two years in captivity. Israel agreed Sunday to free Samir Kantar, a Lebanese convicted in a grisly 1979 attack, along with other prisoners and bodies of Lebanese fighters, in exchange for the bodies of two Israeli soldiers.Israel has balked at Hamas' demands for a large-scale release of Palestinian prisoners, including many convicted in deadly attacks. But the Islamic militants said there was no reason to soften their demands in light of Israel's swap deal with Hezbollah.In a radio interview, Hamas strongman Mahmoud Zahar said the militants would work to release people Israel accused of having blood on their hands like Samir Kantar. We have to take advantage of this to release our prisoners.Israeli government spokesman Mark Regev would not comment on Zahar's remarks.Hamas-affiliated militants in the Gaza Strip captured Schalit two years ago in a cross-border raid that killed two other soldiers.Weeks later, Hezbollah guerrillas burst across Israel's northern border, seizing two other Israeli soldiers, Ehud Goldwasser and Eldad Regev, touching off a monthlong war.After nearly two years of German-brokered negotiations, Israel's Cabinet voted 22-3 on Sunday to trade Kantar for Goldwasser and Regev's bodies.

Before the vote, Israeli Prime Minister Ehud Olmert confirmed the two soldiers were dead. In contrast, Schalit has made an audiotape and sent a letter from captivity.Refusing to release prisoners with blood on their hands — those directly involved in fatal attacks — has been a long-held Israeli principle, though it has been ignored several times in the past.Kantar was serving multiple life terms for infiltrating northern Israel and killing three Israelis — a 28-year-old man, his 4-year-old daughter and an Israeli police officer.

Witnesses said Kantar smashed the little girl's head against a rock and crushed her skull with a rifle butt. Kantar denied killing the girl or smashing her skull. Her mother, while trying to silence the cries of her other daughter, accidentally smothered the 2-year-old.

Because of the revolting details of the case, the planned release appears to set a new standard, possibly pointing the way to freedom for other prisoners in the future.Another prisoner serving multiple life terms, West Bank Fatah leader Marwan Barghouti, is seen by many as a natural successor to moderate Palestinian President Mahmoud Abbas if he is released. Up to now, Israel has refused to consider freeing Barghouti because of the blood on their hands principle.Negotiations for release of Schalit are part of a June 19 cease-fire agreement hammered out by Egyptian mediators between Israel and Hamas. The military said Palestinian militants fired a rocket at southern Israel at dusk Monday, violating the truce. No injuries or damage were reported.In exchange for Schalit, Hamas has demanded freedom for hundreds of Palestinian prisoners held in Israeli jails, though Barghouti is not known to be on the list.

Israel, which is holding about 10,000 Palestinians, has refused to free prisoners involved in deadly attacks. However, in recent days Israeli leaders have been talking about paying a painful price for the soldier, signaling a possible change.On Monday, after the Israel-Hezbollah deal was approved, Gaza militants took a hard line. Schalit will not see the light until the Israelis fulfill our demands, said Abu Mujahid, a spokesman for the Popular Resistance Committees, another armed group involved in his capture. The (Israeli) occupation's decision to release Samir Kantar will pave the way for the release of Palestinian prisoners who are serving lengthy sentences.Critics of the Hezbollah swap have argued that trading Kantar for bodies would offer militant groups a greater incentive to capture Israeli soldiers and less reason to keep captives alive. I'm afraid Hamas, drawing a lesson from this deal, will harden its position, Housing Minister Zeev Biome, one of three government ministers to vote against the Hezbollah swap, told Israel Army Radio. Defending the deal, Olmert told a meeting of his Kadima party on Monday, I knew there would be criticism, but I did this because I wanted the boys to return home.

Israel MPs mull bill to make Golan pullout harder Mon Jun 30, 2:54 PM ET

JERUSALEM (AFP) - The Israeli parliament on Monday adopted at a preliminary reading a bill that would require any withdrawal from the occupied Golan Heights as part of a peace deal with Syria to be put to a referendum. The draft law stipulates that a referendum may only be avoided if a Golan pullout secures the support of two-thirds of MPs, parliamentary sources said.The bill must still be approved at second and third readings before it becomes law.

A total of 65 members of the 120-seat parliament backed the bill on Monday, with 18 voting against.Syria and Israel announced in May that they had resumed peace negotiations through Turkish mediators, ending an eight-year freeze.They have already had two rounds of indirect talks and are due to have two more in July.The Syrians want the return of all of the Golan Heights which Israel seized in the 1967 Middle East war and annexed in 1981 in a move never recognised by the international community.Opinion polls suggest that a majority of Israelis oppose withdrawing from the Golan, now home to some 20,000 Jewish settlers and several military installations.But Prime Minister Ehud Olmert has said Israel is ready to make concessions for the sake of peace.

Israel parliament adopts law on 'enemy' travel Mon Jun 30, 2:02 PM ET

JERUSALEM (AFP) - The Israeli parliament passed a law on Monday banning any citizen who has visited an enemy country in the previous seven years from standing for election to the legislature, triggering the anger of Israeli Arab MPs. Fifty-two members of the 120-seat parliament approved the law at a third and last reading while 24 MPs voted against it, parliamentary sources said.The legislation states that anyone who has visited an enemy country over the past seven years cannot stand for parliament.It is aimed particularly at MPs from Arab-led parties, some of whom have travelled to Lebanon and Syria, neighbouring countries officially at war with Israel.From now on, any Israeli who visits an enemy country without permission will not be elected to the Knesset for (a period of) seven years, crowed Zvulon Orlev, an MP from the far-right National Religious Party.From now, on Arab MPs must choose if they want to be elected to parliament in Damascus or in Jerusalem, added Orlev, one of the architects of the new law.Arab Israeli MP Ahmed Tibi said he would appeal to the Supreme Court against the new law, arguing that it did not receive the absolute majority of 61votes in parliament required of legislation affecting fundamental rights.Former Arab Israeli MP Azmi Bishara -- who had travelled frequently to Syria and Lebanon -- quit parliament and fled into exile in 2007 amid accusations he had collaborated with Shiite militant group Hezbollah during the previous year's war in Lebanon, charges he has consistently denied.

Syrian minister laments Israel's nuclear edge By Khaled Yacoub Oweis Mon Jun 30, 9:03 AM ET

DAMASCUS (Reuters) - Syria's foreign minister said on Monday he wished his country could match Israel's atomic arsenal, but denied U.S. allegations that it had been building a secret nuclear reactor at a site bombed by Israel last year. Walid al-Moualem, making Syria's first official comments on last week's visit to the site by U.N. nuclear investigators, said it had been handled solely by Syrian security officials.Syria would not have allowed the inspectors in if it had such a secret (nuclear) program, Moualem told reporters after meeting his Norwegian counterpart, Jonas Gahr Stoere.As a private citizen, I wish Syria had this program quite simply because Israel has made huge advances in its manufacturing of nuclear bombs, the foreign minister said.Syria has accused the United States of helping Israel conduct the September 6 raid that Washington said destroyed a reactor built with the help of North Korea. Syria said the site was a normal military complex. Israeli officials have kept quiet on the nature of the target.Unlike Syria, Israel has not signed the Non-Proliferation Treaty. It is widely believed to have the only nuclear arsenal in the Middle East, developed over decades with Western help.

Investigators from the International Atomic Energy Agency (IAEA) said after a four-day visit to Syria last week that they had examined the bombed site, but that more checks were needed.Chief inspector Olli Heinonen said the inquiry was off to a good start, with Syria's cooperation satisfactory so far.Syria said it was not hiding anything and urged the world to hold Israel accountable for what it described as a massive Israeli nuclear arms program.The IAEA sent Heinonen's team after receiving U.S. photos of the al-Kibar site that prompted the U.N. nuclear watchdog to put Syria on its proliferation watch list in April.The IAEA inspectorate is expected to report to the agency's board of governors before its next meeting in September.Syria and Israel began indirect peace talks months after the raid. Moualem said the Turkish-mediated talks had their ups and downs but he expected a third round of negotiations to take place in Turkey soon.The present negotiations process aims at establishing the basis to launch direct talks. We have an opportunity to reach a just and comprehensive peace. I hope the Israelis do not waste it by their internal wrangling, Moualem said.Divisions appeared in Israel's ruling coalition last month with the launch of a police investigation into money that Prime Minister Ehud Olmert received from an American financier while in previous government positions.Syria is demanding Israel returns all of the Golan Heights, which Israel captured from Syria in the Middle East war 41 years ago. Israeli officials have said a peace deal depends on Damascus distancing itself from Iran and cutting links to groups such as Hamas and Lebanon's Hezbollah.(Editing by Alistair Lyon and Elizabeth Piper)

Egypt to reopen Gaza border By SALAH NASRAWI, Associated Press Writer Mon Jun 30, 6:49 AM ET

CAIRO, Egypt - Egypt will reopen its Rafah border crossing with the Hamas-run Gaza Strip for two days this week to allow hundreds of stranded on both sides to cross, a Palestinian diplomat in Cairo said Monday. Rafah has been closed for nearly the entire time since the Hamas militant group took over Gaza a year ago. With the opening, which begins on Tuesday, Palestinians who need medical treatment or have Egyptian residency permits would be allowed to cross into Egypt, the diplomat, Nabil Amr, told reporters in Cairo.

Palestinians returning from abroad will also be allowed into Gaza from Egypt, he said, adding that the opening of the border was humanitarian decision in response to appeals from Palestinians stuck because of border closures.The move followed talks on Sunday between Palestinian President Mahmoud Abbas and Egypt's chief of intelligence Omar Suleiman on the Israeli-Palestinian peace efforts.

An Egyptian-brokered cease-fire between Hamas and Israel took effect in Gaza on June 19, though it has been marred by rocket attacks into Israel by the Islamic Jihad group that wounded two Israelis last week. That prompted Israel to close crossings between it and Gaza, though it re-opened one crossing on Sunday to cargo traffic, allowing a trickle of goods into the territory.The truce does not apply to the West Bank, but violence there has spilled over into Gaza and threatened the agreement.As part of the truce, the Palestinians demand the end of Israel's yearlong seal of Gaza's borders and an economic blockade that caused widespread shortages of basic humanitarian goods.The Rafah crossing is the main gateway for Gaza's 1.4 million people for travel abroad. In January, Hamas blew up the border wall between Egypt and Gaza, allowing thousands of people to move in and out for nearly two weeks before it was resealed. The incident seriously heightened tensions in the area.

Hamas has demanded the reopening of Rafah, but Israel has said it will not allow it until an Israeli soldier held captive by Hamas-allied Palestinian militants in Gaza is freed.

Israeli Cabinet approves Hezbollah prisoner deal By ARON HELLER, Associated Press Writer Sun Jun 29, 7:37 PM ET

JERUSALEM - The Israeli government agreed Sunday to free a Lebanese gunman convicted in one of the grisliest attacks in the country's history in exchange for the bodies of two Israeli soldiers killed by Hezbollah guerrillas. The German-mediated deal was a rare political victory for embattled Prime Minister Ehud Olmert and closed a chapter from Israel's inconclusive war against the Lebanese militant group two years ago.But critics warned that the deal's heavy price for Israel could offer militant groups an even greater incentive to kill captive soldiers. In Lebanon Sunday, Hezbollah declared victory and planned celebrations.Israel's Cabinet voted 22-3 to OK the deal to return the bodies of Ehud Goldwasser and Eldad Regev, captured by Hezbollah in a July 2006 cross-border raid that sparked a vicious monthlong war.Before a six-hour Cabinet debate, Olmert announced for the first time that the soldiers were dead. He nevertheless pushed for the deal to be approved, citing the country's deep moral commitment to its dead and captive soldiers.Since we were children, we have been taught that we don't leave wounded in the field and we don't leave soldiers in captivity without doing all we can to free them, he said.Israel will also receive the remaining body parts of its soldiers from the Lebanon war and a thorough Hezbollah report about Ron Arad, a missing Israeli airman whose plane crashed in Lebanon in 1986.The most difficult part for Israel was the release of Samir Kantar. He is serving multiple life sentences for infiltrating northern Israel in 1979 and killing three Israelis — a 28-year-old man, his 4-year-old daughter and an Israeli police officer.

Witnesses said Kantar smashed the little girl's head against a rock and crushed her skull with a rifle butt. The attack has been etched in the Israeli psyche as one of the cruelest in the nation's history. Kantar denied killing the girl or smashing her skull.Her mother, while trying to silence the cries of her other daughter as Kantar and three others rampaged through the apartment, accidentally smothered the 2-year-old.On Sunday, the mother, Smadar Haran Kaiser, said she was devastated by the decision but understood it.The despicable murderer Kantar was never my own personal prisoner, but the state's prisoner, she told a news conference. Even if my soul should be torn, and it is torn, my heart is whole.Israel also agreed to release four other Lebanese prisoners, dozens of bodies and an undisclosed number of Palestinian prisoners.Finance Minister Ronnie Bar-On, who voted against the deal, told The Associated Press that he objected to the deal because it included releasing Palestinian prisoners.Dovish lawmaker Yossi Beilin told Channel 10 TV he would have backed the deal if the soldiers were still alive.There is tremendous difference in my view between saving someone's life and receiving coffins, he said. I pray that we didn't give these people ideas that they can carry out more kidnappings and then ask for whatever they want.Israel was also negotiating a trade with Palestinian Hamas militants for the release of an Israeli soldier captured in a June 2006 cross-border raid from the Gaza Strip.Unlike his comrades in Lebanon, the soldier, Sgt. Gilad Schalit, has sent letters and an audio tape to his parents and is believed to be alive, though he has not been seen since his capture and the Red Cross has not been permitted to visit him either. In Beirut, Hezbollah said the Israeli approval of the deal reflected the guerrilla group's strength. What happened in the prisoners issue is a proof that the word of the resistance is the most faithful, strongest and supreme, the group's Al-Manar TV quoted Hezbollah's Executive Council chief Hashem Safieddine as saying. In the southern city of Sidon, members of the Popular Democratic Party were decorating the central Martyrs Square with pictures of Kantar and hanging banners such as Freedom to the hero, prisoner Samir Kantar and freedom comes with blood not tears.Hezbollah had offered no sign that Goldwasser and Regev were alive, and the Red Cross was never allowed to see them. Ahead of the vote, Olmert said for the first time that Israel has concluded the two soldiers were killed during the raid or shortly after.

We know what happened to them, Olmert told the Cabinet, according to comments released by his office. As far as we know, the soldiers Regev and Goldwasser are not alive.Goldwasser's wife, Karnit, praised Olmert for pushing for the trade, while still trying to come to terms with his declaration. My heart aches. It is very difficult for me. I am very tired, drained inside, she told reporters. All I want to do is to digest things, try to understand what happened ... to rest a bit ... to have my pain.Israeli officials said the deal could take place as early as next week. The trade will likely take place in Germany. Ofer Regev, brother of kidnapped soldier Eldad Regev, said he hadn't given up hope yet.

Until we see otherwise, we will continue hoping for a miracle to happen to us, he said.Associated Press Writers Bassem Mroue in Beirut, Lebanon, Ian Deitch in Jerusalem and Daniel Robinson in Tel Aviv contributed to this report.

A look at Israeli-Lebanese prisoner swaps By The Associated Press Sun Jun 29, 11:26 AM ET

A look at Israeli-Lebanese prisoner swaps:

• 2008: Prime Minister Ehud Olmert declares two soldiers captured by Lebanese militant group Hezbollah in 2006 to be dead. Cabinet approves deal to exchange Lebanese prisoner for bodies of the two soldiers and information on missing Israeli airman.

• 2004: Israel and Hezbollah guerrillas in Lebanon exchange an Israeli civilian and the bodies of three Israeli soldiers for 436 Arab prisoners and the bodies of 59 Lebanese fighters.

• 1996: Israel frees 65 Lebanese prisoners for the bodies of two soldiers captured in fighting in Lebanon.

• 1991: Israel trades 51 Lebanese prisoners for proof that one of its soldiers held in Lebanon is dead.

• 1985: Israel releases 1,150 Arab prisoners, almost all of them Palestinians, in return for three soldiers captured by Lebanese guerrillas in 1982.

• 1983: Israel swaps 4,600 Palestinian and Lebanese captives for six Israeli soldiers abducted Sept. 4, 1982, from their forward post in Lebanon. Most of the Arab prisoners had been rounded up during Israel's invasion of Lebanon.

U.S. proposes new Mideast talks: Palestinian official By Wafa Amr Sat Jun 28, 12:36 PM ET

RAMALLAH, West Bank (Reuters) - The United States has proposed new talks in a push to reach a deal on Palestinian statehood before President George W. Bush leaves office in January, the chief Palestinian negotiator said on Saturday. Ahmed Qurie said U.S. Secretary of State Condoleezza Rice had invited the Israelis and Palestinians to a series of trilateral discussions in New York and Washington.He added that if Israel changed some of its positions on key issues, we can reach a deal by the end of this year.Earlier this month Qurie said it would take a miracle to reach agreement in 2008. It was unclear what had changed since.Senior Palestinian negotiator Saeb Erekat said some progress had been made and a deal was doable, but none of the issues have been agreed yet.Qurie said negotiations were at a similar point to the one they reached in 2000when statehood talks in the Egyptian Red Sea resort of Taba ended without agreement.Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas launched the first round of peace talks in seven years in Annapolis, Maryland, last November.

Bitter disputes over Jewish settlements in the West Bank have undercut U.S. efforts to reach a peace agreement this year.Olmert is involved in a corruption scandal that could force him from office and further disrupt peace talks.His spokesman Mark Regev said: Israel remains committed to the Annapolis framework of trying to reach a historic joint document by the end of this year. Important progress has happened but much work remains ahead.

Negotiators from both sides said progress has been made on some issues and they had started drafting a position paper to try to narrow the gaps between them.Israeli officials say headway has been made on the key question of borders.Among the most difficult stumbling blocks in talks have been the fate of Jerusalem and of Palestinian refugees, Jewish settlements, borders, security, and water.Palestinian negotiators said they had rejected an Israeli proposal to set aside the issues of refugees and Jerusalem for three years.

RICE INTENSIFIES PEACE EFFORT

Qurie said the Palestinians were seeking a state in the West Bank and Gaza, lands Israel occupied during the 1967 Middle East war, and were ready for a swap of equal areas of territory with Israel.
He said the Palestinians had rejected Israeli proposals to annex large settlement blocs in the West Bank and negotiate about the rest of the land.The Israelis began with one position and then changed it, based on accepting facts created on the ground ... We have rejected this Israeli approach, Qurie said. He said the Palestinians would reject any suggestion of an Israeli military presence in a future Palestinian state but would not object to the deployment of foreign or United Nations troops to oversee the implementation of a final deal. In a bid to push the two sides to reach a deal this year, U.S. Secretary of State Condoleezza Rice met negotiators from both sides in Berlin last week on the margins of an international donors' conference. Qurie said Rice had suggested holding more trilateral meetings in July in Washington, in September in New York on the margins of a United Nations General Assembly meeting, and again on November 15 in Washington. (Editing by Andrew Roche)

Mortars, closures disrupt shaky Gaza Strip truce By Nidal al-Mughrabi Fri Jun 27, 7:58 AM ET

GAZA (Reuters) - Palestinian militants in the Gaza Strip fired two mortar shells into southern Israel on Friday in the latest challenge to a ceasefire deal and the enclave's Islamist Hamas rulers, who appealed to all factions to abide by the deal. The shells landed in a farming community near the border with the Gaza Strip, causing no casualties, an Israeli police spokesman said.

There was no immediate claim of responsibility for the cross-border fire, the fourth such incident since the Egyptian-brokered ceasefire began on June 19.Israel has kept border crossings used to bring humanitarian and commercial supplies into the Gaza Strip closed since Wednesday, after a cross-border rocket attack by the Islamic Jihad militant group.Israel allowed fuel to reach the territory's sole power station on Friday.Speaking in Gaza City hours after the two mortars were fired, Hamas leader Ismail Haniyeh urged all parties to respect the national consensus behind the ceasefire.Hamas spokesman Mushir al-Masri lashed out at militants who are defying the truce. It has become clear that some Palestinian parties do not want this calm deal to succeed and they do not want the siege to be lifted, Masri said.Those who fired the rockets did not aim them at the Zionist enemy but fired them to settle internal scores, he added, in an apparent reference to President Mahmoud Abbas's Fatah faction.A militant arm of Fatah, al-Aqsa Martyrs Brigades, said it fired a rocket into Israel on Thursday.Al-Aqsa said it would abide by the ceasefire but vowed to respond to Israeli attacks in the Gaza Strip and the occupied West Bank.

The group said it was not behind Friday's mortar attack.

A European Union official said an estimated 600,000 liters of industrial fuel was being pumped through the Nahal Oz border terminal to Gaza's power station, enough to keep the plant running for several days.

The EU funds fuel deliveries to the power station.

Both sides have been trading blame for breaching the ceasefire agreement, which is backed by the West with the aim of advancing Israeli-Palestinian peace talks that have shown little outward sign of progress.The ceasefire deal calls for Hamas to stop cross-border rocket fire and for Israel to gradually ease its embargo on the Gaza Strip.(Additional reporting by Joseph Nasr; Writing by Adam Entous; Editing by Giles Elgood)