Fayyad is an internationally respected economist and politician. Salam Fayyad received his MBA from St. Edward’s University in 1980. Fayyad has a PhD in economics from the University of Texas at Austin, where he was a student of William Barnett and did early research on the American Divisia Monetary Aggregates, which he continued on the staff of the Federal Reserve Bank of St. Louis. Fayyad began his career teaching economics at Yarmouk University in Jordan, before joining the World Bank from 1987 – 1995. He subsequently became the International Monetary Fund representative to the Palestinian National Authority until 2001, when he accepted the offer to become its finance minister.

Upon resigning as finance minister, Fayyad ran as founder and leader of the new Third Way party in the legislative elections of 2006 alongside Hanan Ashrawi and Yasser Abd Rabbo. Fayyad and Ashrawi won their seats.

He is seen as pro-Western and was predicted to be offered prime minister by both Fatah and by the winner of the elections: the List of Change and Reform. In response to the offer, Fayyad presented several conditions to becoming prime minister, including that Hamas would recognise Israel, which Hamas declined.

On 17 March 2007, Fayyad was again appointed finance minister, this time within the Fatah-Hamas coalition government. On 15 June 2007, following the Hamas takeover of the Gaza Strip, Fayyad was appointed prime minister of a new “independent” government (without any Fatah or Hamas members) which is supported by the Fatah, Israel and the West.

This appointment has been challenged as illegal, because while the Palestinian Basic Law permits the preseident to dismiss a sitting prime minister, the appointment of a replacement requires the approval of the Legislative Council. The law provides that after removal of the prime minister (in this case, Ismail Haniyeh), the outgoing prime minister heads a caretaker government. The current Legislative Council, in which Hamas holds a majority of seats, has not approved the appointments of Fayyad or the balance of his new government. Fayyad’s appointment was never placed before, or approved by the it. Haniyeh continues to operate as prime minister in Gaza, and is recognized by a large number of Palestinians as the legitimate acting prime minister. Anis al-Qasem, a constitutional lawyer who drafted the Basic Law, is among those who publicly declared the appointment of Fayyad to be illegal.

On 17 October 2008, while visiting the University of Texas in Austin, he received the Distinguished Alumni Award before the Texas-Missouri football game, presented by the Ex-Students’ Association of the University of Texas.

On 7 March 2009, Salam Fayyad submitted his resignation to President Mahmoud Abbas.

Links

• Salam Fayyad – Wikipedia, the free encyclopedia
• Salam Fayyad – Election Updates

They discussed Egypt’s efforts to broker a long-time ceasefire in the war-torn Gaza between Israel and the Hamas-led Palestinian factions, as well as the opening of the Gaza border crossings to allow humanitarian aid into the enclave, said Egypt’s official MENA news agency.

Israeli warplanes launched a series of airstrikes on Sunday night on several targets in the Gaza Strip, including an empty Hamas police station and the borderline between Gaza and Egypt, wobbling the fragile temporary ceasefire roughly observed since Jan. 18.

According to MENA, Mubarak, Abbas and al-Faisal also reviewed the latest developments of the inter-Palestinian dialogue, which would lead to serious negotiations between Palestinians and Israel.

Abbas’ Cairo tour coincides with a Hamas delegation’s separate talks with Egyptian mediators on reaching a formal ceasefire agreement with Israel.

Earlier on Sunday evening, Abbas warned here that there will be no inter-Palestinian talks unless Hamas accepts the authority of the Fatah-dominated Palestine Liberation Organization (PLO).

Abbas told reporters at a press conference that “we make it clear that… no dialogue with those who rejects the Palestine Liberation Organization,” referring to the rival Hamas movement who took control of the Gaza Strip in a coup in June 2007.

“The organization (PLO) is the only representative of the Palestinians,” he added.

Egypt has proposed a “lasting” truce between Israel and Palestinian militant groups as of Feb. 5 and a fresh bout of the inter-Palestinian national unity dialogue on Feb. 22, which was boycotted by Hamas in November.

The Hamas move enraged Egypt, which held Hamas responsible for provoking the 22-day war and is trying to avail itself of the Gaza situation to prod the sluggish inter-Palestinian reconciliation.

“The inter-Palestinian rift had harmed a lot the Palestinian cause and led to the suffering of the people there,” Mubarak said, quoted by local magazine Police on Sunday.

Meanwhile, Egyptian Foreign Ministry spokesman Hossam Zaki warned Sunday that the international donors might think twice over Gaza reconstruction if the feud continues.

“If they (Palestinians) want a real international effort to help them… the only way is their reconciliation and unity,” Zakiwas quoted by the Egyptian Gazette.

After his stop in Cairo, Abbas is expected to fly to Paris for more talks with Europeans.

Mubarak meets Abbas, Saudi FM on Gaza, inter-Palestinian dialogue_English_Xinhua

Across the Gaza Strip, thousands took to the streets in support of Hamas and its leader Khalid Mashaal who called for the creation of an alternative representative authority to replace the Fatah-run Palestinian Liberation Organization (PLO), Press TV’s correspondent Tarek al-Farra reported from Khan Younis on Saturday.

The protesters, who were chanting slogans in support of the resistance movement, waved Turkey’s red flag alongside green Hamas banners, after Turkish Premier Recep Tayyip Erdogan stormed out of the Work Economic Forum in support of Gaza.

Erdogan walked out of the Davos forum on Friday in protest to a heated speech by Israeli President Shimon Peres in favor of the regime’s bloody military offensive in the Gaza Strip.

The Turkish premier, who had been cut short by an American mediator when trying to respond to Pres’s remarks, received a warm welcome from the people of Turkey upon his arrival in Ankara.

In the last days Israel started pounding the Gaza Strip and continued for 23 days, killing over 1330 Palestinians, injuring almost 5,500, and leaving up to 70 thousand homeless.

One of Israel’s stated objectives was to topple Hamas and reduce its popularity among the Palestinian people.

Saturday demonstrators in Khan Younis, however, said that not only had Israel failed to bring down Hamas, but its military campaign had added to the democratically-elected government’s popularity among Palestinians.

“The Israeli cowards failed in this war they thought that they would destroy the resistance and Hamas, but we must tell them that the popularity of Hamas has grown more than before,” said one of the demonstrators.

“The resistance will continue to work toward achieving its goals, which are liberating all Palestinian prisoners, repatriating all Palestinian refugees and completely ending the siege,” he added.

Hamas Spokesman Hamid al-Rakeb, who took part in the rally, also said that Israel’s offensive had increased Palestinians’ confidence.

“The message coming out of Gaza after the war is a cry of rage against the Israeli occupation. Gazans are holding on more to their rights and the resistance is more confident of its ability to achieve bigger victories in the future,” al-Rakeb said in the southern city.

Hamas announced that it no longer recognized Mahmoud Abbas as the Palestinian Authority Chief after his term expired on January 8.

Press TV – Gazans pour to streets to back Hamas

There were no reports of injuries from the predawn Israeli strike in the town of Rafah, along Gaza’s border with Egypt. Witnesses and Hamas Islamists said a metal foundry was damaged.

Moments earlier, a militant group with links to Palestinian President Mahmoud Abbas’s Fatah movement claimed responsibility for firing a rocket at southern Israel late on Wednesday.

The rocket was the first fired from Gaza since Israel and Hamas called separate ceasefires ending a 22-day Israeli offensive on Jan. 18.

It caused no casualties, but Israeli leaders facing a Feb. 10 election in a campaign focussed on security concerns, have vowed to respond to rocket salvoes its offensive in Gaza had aimed to curtail.

Israel has said it will hold Gaza’s Hamas rulers responsible for all attacks launched from the coastal territory, and had warned of a stronger response to the killing of a soldier on Tuesday in an explosion by a Gaza border fence.

“Israel will respond very severely,” an Israeli security source said on Wednesday, and added, “we haven’t seen it all,” referring to the Israeli air strikes carried out earlier in the day on tunnels under the Gaza-Egypt border.

“We will remain ready, with our finger on the trigger around the clock,” Benjamin Ben-Eliezer of Israel’s decision-making security cabinet said in remarks televised on Wednesday.

Hamas defended Tuesday’s bombing, citing the killing of two Palestinians by Israel last week. Israeli forces killed one Palestinian, identified by Gaza medical workers as a farmer after the bombing and later wounded a militant on a motorcycle.

VIOLENCE CLOUDS U.S. ENVOY VISIT

The violence clouded a visit by U.S. President Barack Obama’s Middle East envoy, former U.S. Senator George Mitchell, who said in Jerusalem on Wednesday it was “of critical importance that the ceasefire be extended and consolidated” with respect to Israel and Gaza.

Mitchell met Israeli Prime Minister Ehud Olmert and Defence Minister Ehud Barak on Wednesday and will meet Abbas on Thursday.

Western diplomats said Mitchell would not meet Hamas, a group shunned by the U.S. and Europe for it refusal to recognise Israel.

Mitchell said on Wednesday any durable truce between Israel and Hamas must end smuggling into Gaza and reopen border crossings controlled by Israel to relieve its economic blockade of the enclave where half the 1.5 million people depend on food aid.

He cited a U.S.-brokered 2005 agreement calling for forces loyal to Abbas to be deployed in Gaza. Hamas seized Gaza from Abbas’s forces in 2007, a year after the Islamists won a parliamentary election.

“President Obama has said the United States is committed to Israel’s security and to its right to defend itself against legitimate threats,” Mitchell said.

“The president has also said the United States will sustain an active commitment toward reaching the goal of two states living side by side in peace and security,” he added.

Olmert told Mitchell Israel would object to reopening any crossings with Gaza save to permit the flow of vital aid to the territory, until an Israeli soldier captured in 2006 was freed, an Israeli official said, speaking on condition of anonymity.

“We don’t intend to open the crossings before Gilad Shalit returns home,” Ben-Eliezer, the Israeli cabinet minister said, referring to the soldier seized by Gaza militants in a cross-border raid.

Israeli leaders fear Hamas could rebuild tunnels under the Gaza-Egypt border to replenish an arsenal of rockets used in attacks on its southern communities that disrupt life for tens of thousands of citizens.

Some 1,300 Palestinians, including at least 700 civilians, were killed in the offensive, the Hamas-run Health Ministry in the Gaza Strip said. Israel put its death toll in the war at 10 soldiers and three civilians.

Israel strikes in Gaza as Obama envoy holds talks | Reuters

Residents near the town of Rafah fled as missiles hit tunnels through which Israel says militants smuggle arms.

The strikes came ahead of US envoy George Mitchell’s visit to promote a permanent Israel-Hamas ceasefire.

Both sides declared ceasefires on 17 and 18 January to end Israel’s three-week offensive on Gaza.

The land, air and sea assault killed about 1,300 Palestinians, including 400 children. Thirteen Israelis died.

It is not clear whether there were any casualties from the airstrikes, but the latest violence is a sign of just how fragile the truce is, says the BBC’s Bethany Bell in Jerusalem.

Push for peace

Israel had responded to Tuesday’s roadside bomb – which killed one soldier and wounded three – by immediately sending troops and tanks into Gaza backed by helicopters.

Ensuing fighting around the town of Khan Younis and the Kissufim border crossing left one Palestinian dead, medical sources said.

Prime Minister Ehud Olmert threatened further strikes, saying the incursion was merely an initial reaction and that Israel’s full response was still to come, Haaretz newspaper reported on its website.

Both Mr Mitchell and EU foreign policy chief Javier Solana are in the region to push for peace talks.

Mr Mitchell, newly appointed by US President Barack Obama, is to hold talks with Mr Olmert and Palestinian President Mahmoud Abbas, although correspondents say he is not expected to meet Hamas officials.

He has already held talks in Cairo about Egypt’s mediation efforts.

Israeli and Palestinian faction representatives have visited Cairo for talks with Egyptian officials since the ceasefires came into effect.

Hamas wants an end of Israel’s punishing blockade of Gaza. Israel wants a long-term ceasefire and curbs on Hamas rearming.

During Mr Mitchell’s visit, Israelis will want to hear what ideas the US has for advancing the peace process, as well as how Washington will tackle the Iranian nuclear issue, our correspondent says. But with Israeli elections due to take place in two weeks, it is likely the US envoy will spend much of his time listening, as Mr Obama has asked him to do, our correspondent adds.

Mr Mitchell’s visit is being seen by many Israelis as a sign of US engagement, and by others as a sign of pressure.

Tunnels working

The Gaza Strip’s southern frontier is peppered with tunnels into Egypt that were pummelled by air-strikes during Israel’s offensive.

One of Israel’s stated goals was to halt the smuggling of weapons – including rockets that were being fired against Israeli towns – into the coastal enclave through the network of tunnels.

But smuggling resumed shortly after the non-negotiated cease-fires were declared.

Residents along the border say food, fuel and other goods are moving through the several dozen tunnels that are still operational.

BBC NEWS | Middle East | Israeli jets target Gaza tunnels

Mr. Olmert, who said all Israeli objectives for the war had been reached, said Israel was responding positively to a call by President Hosni Mubarak of Egypt earlier in the day for an immediate cease-fire, in a clearly orchestrated move by two countries that both see the Hamas movement in Gaza as a threat. Meanwhile, Hamas leaders outside Gaza have insisted that the group will fight on, regardless of any Israeli declaration.

The announcement came on a day in which Israel was again criticized by the United Nations over civilian deaths in Gaza — this time after a tank fired at a United Nations school, killing two young brothers taking shelter there.

United Nations aid officials raised questions about whether the attack, and others like it, should be investigated as war crimes. The Israeli Army said that it was investigating the reports at the highest level but that initial inquiries indicated that troops were returning fire from near or within the school.

The Israeli cease-fire, which becomes effective at 2 a.m. Sunday, could mean an effective end to a three-week-old war that has killed at least 1,200 Palestinians, with more buried under rubble, and 13 Israelis. But even then, the shape of any lasting peace was far from clear.

Israel has signaled that its troops will stay in Gaza until a formal truce is signed that meets Israeli goals of stopping rocket fire from Gaza and sharply hindering the smuggling of arms, weapons, cash and fighters into Gaza through tunnels from Egypt. But the government says it will not sign any deal with Hamas, which is committed to Israel’s destruction and whose rule over Gaza Israel does not want to recognize.

Also, Israeli officials said that they reserved the right to attack again in the future if Hamas kept firing rockets into Israel. Hamas, battered but hardly broken, is expected to reassert its political control over Gaza and to resist any attempt to restore a presence for Fatah, the rival faction that runs the Palestinian Authority, within Gaza.

The announcement of the unilateral cease-fire came on the 22nd day of the war, after repeated calls by the United Nations Security Council and Secretary-General Ban Ki-moon for an immediate halt to the fighting and the deaths of civilians.

The military said that it struck hundreds of targets overnight, including rocket-launching sites, weapons caches and 70 smuggling tunnels, and that its troops tightened the encirclement of Gaza City.

Though exiled Hamas figures vowed to keep fighting, it was unclear how the cease-fire will be received by leaders within Gaza. The group’s representatives were scheduled to meet Egyptian officials in Cairo who are trying to pull together a sustainable truce of at least a year that will end rocket fire into Israel, hinder Hamas resupply and reopen all the crossings into encircled Gaza from both Israel and Egypt.

Particularly concerned about limiting smuggling, the United States and Israel signed a “memorandum of understanding” on Friday in Washington that calls for expanded cooperation to prevent Hamas from rearming through Egypt. The agreement, which is vague, promises increased American technical assistance and international monitors, presumably to be based in Egypt, to crack down on the smuggling.

As important, the United States agreed to work with NATO partners to interdict arms smuggling into Gaza by land and sea from Syria and Iran, and in a letter, Britain, France and Germany also offered to help interdict the smuggling of arms to Hamas.

On Saturday, President Nicolas Sarkozy of France announced a summit meeting about Gaza for Sunday, of which Mr. Mubarak would be co-chairman. Mr. Sarkozy announced that Chancellor Angela Merkel of Germany and Prime Minister Gordon Brown of Britain would attend; Mr. Brown said later he was “considering” attending. Egypt has invited Italy, Spain, Turkey, Mr. Ban and Mahmoud Abbas, the Palestinian president, whose Fatah party governs the West Bank. The meeting, to take place in the Egyptian resort of Sharm el Sheik, is about bringing a halt to the fighting in a sustainable way and reconstruction aid for Gaza.

While Mr. Sarkozy initiated the process with Mr. Mubarak in the waning days of the Bush administration, it has been in the end a deal shaped by Egypt and Israel.

Mr. Mubarak’s foreign minister, Ahmed Aboul Gheit, said that his country would not be bound by the memorandum of understanding agreed to by the United States and Israel and would not accept foreign troops on its soil. But officials of both Israel and the United States say Egypt has been showing a new seriousness about stopping the smuggling.

The Arab and Muslim world again appeared to be split into two camps. Egypt and Saudi Arabia have been openly critical of Hamas, pressing it to agree to a cease-fire. Qatar, meanwhile, which is close to Iran, held a meeting with Syria, Iran, Mauritania and Hamas’s exiled political leader, Khaled Meshal, as the Palestinian representative. Mr. Abbas, who is supported by the United States and Egypt, had refused to go to Qatar.

In Beit Lahiya, some 1,600 displaced Gazans have taken shelter at a school run by the United Nations Relief and Works Agency, or Unrwa, which cares for Palestinian refugees from the 1948-49 war and their descendants.

John Ging, the Gaza director of the agency, said that two brothers, ages 5 and 7, were killed about 7 a.m. by Israeli fire at the school. Their mother, who was among 14 others wounded, had her legs blown off.

“These two little boys are as innocent, indisputably, as they are dead,” Mr. Ging said. “The question now being asked is: is this and the killing of all other innocent civilians in Gaza a war crime?”

Christopher Gunness, the refugee agency’s spokesman, said: “Where you have a direct hit on an Unrwa school where about 1,600 people had taken refuge, where the Israeli Army knows the coordinates and knows who’s there, where this comes as the latest in a catalogue of direct and indirect attacks on Unrwa facilities, there have to be investigations to establish whether war crimes have been committed,” as well, he added “as violations of international humanitarian law.”

The strike was the fourth time Israel has hit an Unrwa school during the war on Hamas. On Jan. 6, Mr. Ging said, 43 people died when an Israeli shell hit the compound of a school in Jabaliya. Israel has disputed the death toll and said it was returning mortar fire from the school compound.

Four Israeli soldiers, two of them officers, were seriously hurt by mortar fire in fighting on Saturday morning, the army said, suggesting that they were victims of friendly fire. And it said that Hamas had fired 12 rockets at Israel on Saturday, a sharp reduction from daily totals since the start of the war.

While the details are debated and the dead are counted, a critical long-term issue is whether the Gaza operation restores Israel’s deterrent. Israel wants Hamas, Hezbollah, Iran and the Arab world to view it as a nation too strong and powerful to seriously threaten or attack. That motivation is one reason, Israeli officials say privately, for going into Gaza so hard, using such firepower, and fighting Hamas as an enemy army.

The answer won’t be known for many months, but the key to the Muslim world’s reaction is actually that of the Israeli public, said Yossi Klein Halevi, of the Adelson Institute for Strategic Studies in Jerusalem. “The Arabs take their cue from Israeli responses,” he said. “Deterrence is about how Israelis feel, whether they feel they’ve won or lost.”

Mr. Halevi cited both the 1973 war — which Egyptians celebrate and Israelis mourn, though it ended with a spectacular Israel counterattack — and the 2006 war against Hezbollah in Lebanon.

Hezbollah’s leader, Hassan Nasrallah, apologized for the 2006 war on television, “but he quickly reversed himself to declare a wonderful victory when he saw the Israeli public declaring defeat,” Mr. Halevi said.

Even more important, perhaps, this Gazan war is a test case for any potential Israeli withdrawal from the occupied West Bank. If Israelis feel that the West Bank will turn into another kind of chaotic, Hamas-run Gaza, they will be unwilling to withdraw — especially if they believe that once they withdrew, and if they were attacked from the West Bank, they would not be allowed to respond with force.

“Gaza is an important test of whether we can defend ourselves within the 1967 boundaries,” Mr. Halevi said, noting that Hamas had been attacking Israel proper, not settlements. “Will we be able to defend ourselves if we need to from the West Bank? Will the international community let us?”

The Israeli public has stayed united behind the war as a necessary battle, despite serious misgivings about the death toll of Palestinian civilians and international condemnation. Even Meretz, a party on the left of Israeli politics, supported the air war.

Hamas has modeled itself on Hezbollah, calling on Iranian support. Mr. Nasrallah once spoke of Israeli power as a spider web — impressive from afar, but easily brushed aside. This war against Hamas, Mr. Halevi said, “is the revenge of the spider.”

Israel Declares Cease Fire; Hamas Says It Will Fight On – NYTimes.com

On Thursday, a salvo hit northern Israel but Lebanese and Israeli officials were quick to play down that incident, blaming not the Iranian-backed Hezbollah movement, an ally of Gaza’s Hamas, but smaller, Palestinian groups in Lebanon. Israel and Hezbollah fought a month-long war in 2006.

“Three rockets fired into Israel landed outside the city of Kiryat Shmona,“ police spokesman Micky Rosenfeld said about Wednesday’s incident in the Galilee.

Security sources in Lebanon said five rockets were fired and two fell in Lebanon. Witnesses in south Lebanon said Israel responded with artillery fire. There were no immediate reports of casualties or further Israeli military action.

United Nations Secretary General Ban Ki-moon arrived in Cairo at the start of a major diplomatic push to end the war in the Gaza Strip, where Israel has been battling Hamas Islamists for 19 days in a bid to end their rocket fire on its towns.

Israeli troops edged closer to the heart of the city of Gaza on Wednesday morning and international organisations expressed growing concern about the plight of children trapped there.

The Palestinian death toll rose to 971, Gaza’s Health Ministry said, counting some 400 women and children among those killed. Israel says 10 Israeli soldiers and three civilians hit by Hamas rockets fired across the border have been killed.

Sporadic explosions, machine gun fire and the wail of ambulances pierced the night after Israel’s senior general said more work lay ahead for his troops in their stated mission of stopping the Hamas rocket attacks.

Israeli aircraft attacked about 60 targets, including Hamas police headquarters in the city of Gaza, eight squads of gunmen, five rocket-launching sites and some 35 weapons smuggling tunnels under the Gaza-Egypt border, the military said.

Three rockets fired from the Gaza Strip landed in southern Israel, causing no casualties, emergency services said.

RED CROSS APPEAL

The head of the International Committee of the Red Cross (ICRC) visited the densely populated Palestinian enclave on Tuesday and said what he saw was shocking.

“It is unacceptable to see so many wounded people. Their lives must be spared and the security of those who care for them guaranteed.“ ICRC President Jakob Kellenberger said.

He urged both sides to spare civilians and let aid workers do their work.

The chief U.N. aid official for Gaza appealed to the international community to protect Gaza’s civilians, saying nowhere in the territory of 1.5 million people was safe any longer with the conflict becoming “a test of our humanity“.

Trying to end the bloodshed, Ban planned to meet leaders in Egypt, Israel, Jordan and Syria. He has indicated he will have no direct contact with Hamas.

U.N. spokeswoman Michele Montas said Ban also would “demand that urgent humanitarian assistance be provided without restriction to those in need“.

In Cairo, a Hamas delegation resumed talks on a ceasefire plan proposed by Egypt, which borders the Gaza Strip and Israel and has made peace with the Jewish state.

Hamas says Israel must pull back all its troops under a ceasefire and end the blockade of the Gaza Strip that it tightened after the group seized the coastal enclave from forces loyal to Palestinian President Mahmoud Abbas in 2007.

Israel has rebuffed as “unworkable“ a U.N. Security Council ceasefire resolution last week and said a truce must ensure Hamas cannot rearm through tunnels under the Gaza-Egypt border.

Israeli tanks have moved closer to the densely populated downtown area of the city of Gaza, but have not entered, residents said.

Human rights groups have reported shortages of vital supplies, including water, in the Gaza Strip. A fuel shortage has brought frequent power blackouts.

Israel has permitted almost daily truck shipments of food and medicine. But Human Rights Watch said Israel’s daily three hour break in attacks to facilitate the supply of humanitarian aid to Gazans was “woefully insufficient“.

Day 20: Israel struck by rockets fired from Lebanon – Nachrichten English-News – WELT ONLINE

There is speculation the leaflets may mean Israel will adopt new tactics in its battle with Palestinian militants.

Israel says it has attacked dozens more Hamas targets, including what it says were rocket-launching sites, weapons stores and smuggling tunnels.

Hamas militants fired more than 30 rockets across the border, injuring two Israelis in Ashkelon, Israel added.

Medical staff in Gaza say more than 820 Palestinians have died during the two-week offensive, including 235 children.

Israeli forces quoted by AFP news agency said at least 550 militants had been killed so far. Thirteen Israelis have died in the conflict, most of them soldiers.

The Hamas leader-in-exile, Khaled Meshaal, condemned the Israeli offensive as a “holocaust”, in a speech broadcast to millions across the Arab world via al-Jazeera TV.

From his base in Syria, he said Israel had “finished off the last chance” for compromise and settlement, and that the war in Gaza had brought resistance to every Palestinian household.

The conflict has sparked worldwide anti-war demonstrations, with tens of thousands of people joining rallies on Saturday in the US, Europe and the Middle East.

Rocket fire

In Gaza, leaflets and phone messages in Arabic urged residents to keep away from sites linked to Hamas, saying that the Israeli Defense Forces (IDF) were not targeting Gazans but “Hamas and the terrorists only”.

One phone message said “the third stage” of the operation would start soon. It is two weeks since air strikes on Gaza began. The ground attacks started a week ago.

Correspondents say phase three could see Israeli forces moving deeper into cities and refugee camps – involving new risks for Israeli soldiers and civilians in the Gaza Strip.

In what appeared to be the bloodiest incident on Saturday, Palestinian medical staff said eight Palestinian civilians were killed by Israeli fire in Jabaliya – a claim later denied by the Israeli army.

Israel said it had launched more than 70 attacks on Hamas targets by air, land and sea, “hitting armed terror operatives in different incidents”.

An Israeli army spokesman said the commander of the Hamas’ rocket-launching squads in Gaza City, Amir Mansi, was among those killed.

There has been no word from Hamas, but militants continued to fire rockets into Israel.

Israel is preventing international journalists from entering the coastal strip, and none of the figures could not be independently confirmed.

Strained diplomacy

On the ground, Israeli troops are reported to have moved closer to the edge of Gaza City, though they have yet to go into the most densely-populated areas.

The continued violence comes as rival Palestinian groups converged on Cairo for discussions about an Egyptian ceasefire initiative, which is also sponsored by France.

Palestinian Authority President Mahmoud Abbas urged all sides to accept the proposal “without delay”, after meeting Egyptian President Hosni Mubarak in Cairo.

But Mr Abbas – who heads the secular Fatah movement, bitter rivals of Hamas – does not control Gaza, and analysts say he will have little impact on the course of the conflict.

Hamas, which was elected in 2006 and took control of Gaza in June the following year, has sent delegates to Cairo for the second time in a week for separate talks.

From Damascus, Khaled Meshaal said a breakthrough would come only if Israel immediately stopped the bombardment, lifted the blockade of Gaza, opened all crossings and withdrew its troops.

Egypt negotiated the last ceasefire between Hamas and Israel but, correspondents say, this conflict has strained an already difficult relationship between Cairo and Hamas.

Israel and Hamas have ignored a UN Security Council call for an immediate ceasefire that would lead to the withdrawal of Israeli troops.

Israel said the continued rocket attacks showed the resolution was “unworkable”, while Hamas insisted any truce must include the ending of Israel’s economic blockade of Gaza.

Aid agencies say Gaza’s 1.5 million residents are in urgent need of food and medical aid.

The UN says it has resumed aid deliveries in Gaza after suspending operations on Thursday when it said the driver of one of its lorries was killed by Israeli fire.

The IDF said it was “100% certain” it did not attack the vehicle.

The violence erupted as a six-month truce between Israel and Hamas unravelled in November and comes one month before a parliamentary election in Israel.

BBC NEWS | Middle East | Israel warns Gaza of escalation

The rockets, presumably launched in support of Hamas, could presage the opening of a second front. The Israeli Army, in a brief statement, said it “responded with fire against the source of the rockets,” which landed near the town of Nahariya. Two Israelis were slightly wounded, the police said.

Lebanese security sources told Reuters that they believed it was unlikely that the rockets were fired under instructions from the militant group Hezbollah. But there was no confirmation or denial from Hezbollah itself.

In 2006, after the kidnapping of an Israeli soldier just outside Gaza, a large Israeli operation there was overshadowed by Israeli’s massive response to an attack in the north by Hezbollah, which turned into what is known as the Second Lebanon War.

On Wednesday, Israel had said that it would send senior officials to talk with Egypt about halting the conflict in Gaza, but there were no immediate signs of a diplomatic breakthrough, and fighting between Israel and Hamas militants continued after a three-hour lull for humanitarian aid to be distributed.

International pressure for a negotiated cease-fire intensified after Israeli shells killed some 40 people at a United Nations school in Gaza on Tuesday. Israel said Hamas militants had fired mortar shells from the school compound prior to Israel’s shelling.

Israel suspended its military operations in Gaza for three hours on Wednesday to allow humanitarian aid and fuel for power generation to reach Gazans, who used the afternoon break to shop.

But fighting resumed soon afterward. In the evening, the Israeli Army dropped leaflets warning the citizens of Rafah, next to the border with Egypt, to leave their homes. Israel has been bombing the tunnel networks through which arms and consumer goods are smuggled from Egypt into Gaza.

The rockets from Lebanon fell in residential areas. Shimon Koren, head of the northern district police, instructed residents of Nahariya and Kabri to enter bomb shelters and he instructed residents in nearby localities to open their shelters. School was cancelled in Nahariya and nearby Shlomi. The Israeli government said it welcomed the efforts of France and Egypt to work out a durable cease-fire. It said it would end its assault if Hamas stopped firing rockets into Israel and ended the smuggling of weapons from Egypt. It said that if a durable cease-fire took hold, it would reopen border crossings into Gaza for goods and people. But Israeli and Hamas officials both denied an assertion by the French president, Nicolas Sarkozy, that a cease-fire had been agreed upon.

“There is an agreement on general principles, that Hamas should stop rocket fire and mustn’t rearm,” a senior Israeli official said Wednesday evening. “But that’s like agreeing that motherhood is a good thing. We have to transform those agreed principles into working procedures on the ground, and that’s barely begun.”

The government spokesman, Mark Regev, said that “the challenge now is to get the details to match the principles.”

There were early signs that a formal diplomatic negotiation could begin after 12 days of fighting. Egypt’s chief of intelligence, Omar Suleiman, is expected to serve as a go-between for Israel and Hamas. Two Israeli officials — a senior aide to Prime Minister Ehud Olmert, Shalom Turgeman, and a senior defense official, Amos Gilad — are expected to go to Egypt on Thursday to begin discussions, Israeli officials said.

The United States has been involved behind the scenes, senior Israeli and French officials said, with Secretary of State Condoleezza Rice “constantly on the phone” with Mr. Olmert, according to one Israeli official.

In Washington, the White House spokeswoman, Dana M. Perino, said of talks about a cease-fire: “As I understand, the Israelis are open to the concept, but they want to learn more about the details; so do we.”

At the United Nations, several Arab delegates said Wednesday night that they thought they now had enough votes to approve a Security Council resolution calling for an immediate cease-fire. That would likely put the United States and other Western powers, which oppose a binding resolution, in the awkward position of having to veto a cease-fire.

A senior French official in Paris said that Mr. Sarkozy’s earlier comment about an agreement on a cease-fire was misunderstood: “The plan is not a cease-fire; the plan is a road map toward a cease-fire.” One crucial aspect of any deal is how to prevent new smuggling tunnels from being built under Egypt’s border with Gaza.

The senior Israeli official raised the possibility of reaching “tacit agreements” with Hamas to end rocket fire, while also persuading Egypt to allow American and perhaps European army engineers to help seal its border with Gaza above and below ground.

Hamas is insisting that any new arrangement include the reopening of border crossings for trade with Israel and the reopening of the Rafah crossing into Egypt for people.

President Hosni Mubarak of Egypt has said that a 2005 agreement on the Rafah crossing, reached with Israel and the Palestinian president, Mahmoud Abbas of Fatah, must be respected. That agreement called for a Palestinian Authority presence at the crossing, supervision by European Union monitors and Israeli video surveillance of who entered and left.

Hamas wants to control the crossing itself and is not eager to cooperate with Fatah, its -rival.

In Washington, President-elect Barack Obama said Wednesday that upon taking office he would “engage immediately” in the Middle East crisis and that he was “deeply concerned” about the loss of life on both sides.

“I am doing everything that we have to do to make sure that the day I take office we are prepared to engage immediately in trying to deal with the situation there,” he said at a news conference. “Not only the short-term situation but building a process whereby we can achieve a more lasting peace in the region.”

In Gaza, John Ging, the director of Gazan operations for the United Nations Relief and Works Agency, visited the school in the Jabaliya refugee camp where Israeli shells fell Tuesday. He denied that Hamas militants had fired mortar shells from within the school compound and called for an international investigation into the attack, which he said had killed 40 people.

Israeli officials said they were continuing to investigate, but reiterated that Hamas had been using the school as a base. Mr. Gilad, the defense official, told Israeli Army radio: “This school served as a base for Hamas men whose identity we know. They fired from inside the school compound, and the army fired back at the source. The time was after school hours, and this school is an example of the cynical and cruel use Hamas does with civilian facilities.”

Casualty figures are hard to verify, but officials at Shifa Hospital in Gaza City and the Gazan Ministry of Health said 683 Palestinians had died since the conflict began Dec. 27, including 218 children and 90 women. They said 3,085 had been wounded. The Palestinian Center for Human Rights in Gaza said 130 children age 16 or under had died. The United Nations estimated a few days ago that a quarter of the dead were civilians.

But Palestinian residents and Israeli officials say that Hamas is tending its own wounded in separate medical centers, not in public hospitals, and that it is difficult to know the number of dead Hamas fighters, many of whom were not wearing uniforms.

Israel says it has killed at least 130 Hamas fighters. Ten Israelis have been killed during the offensive, including three civilians. Most of the seven dead Israeli soldiers were killed in so-called friendly fire.

“They have legitimised the murder of their own children by killing the children of Palestine,” Mahmoud Zahar said in a televised broadcast recorded at a secret location. “They have legitimised the killing of their people all over the world by killing our people.”

Mr Zahar made his first appearance since Israel launched its offensive. Dressed in a dark suit, he declared: “Victory is coming, God willing.”

As night fell on the territory, most of which is without electricity, the sky above Gaza was illuminated by explosions and flares from the pitched battle on Gaza City’s northern fringes, where Israeli tanks, helicopters and artillery fought to dislodge Hamas guerrillas. Witnesses said that the battle had, for the first time, spilled into Gaza City itself, where the head of Hamas’s armed wing warned that thousands of his fighters were waiting.

The Israeli military said last night that three of its soldiers were killed and 24 wounded by a shell from one of its own tanks in a battle near Gaza City.

Abu Obeida, the leader of Hamas’s military wing, made his first appearance on Gaza television, his face masked in a red and white scarf, to goad Israeli forces massed outside the teeming city of 400,000 people. “We have prepared thousands of brave fighters who are waiting for you in each corner of the street and will welcome you with fire and iron,” he said.

Despite growing international calls for a ceasefire, neither side has shown the slightest intention of backing down. Israel, supported by the outgoing Bush Administration in the United States, rejected European calls for an immediate ceasefire reiterated during a peace mission by President Sarkozy of France. Israel argues that it needs to break Hamas’s military capacity if a durable ceasefire is to be negotiated. “We cannot accept a compromise that will allow Hamas to fire \ against Israeli towns in two months’ time,” Prime Minister Ehud Olmert told Mr Sarkozy last night.

Hamas, meanwhile, kept firing rockets into southern Israel, launching about 40 of its home-made Qassam rockets and more sophisticated Grad missiles. They again hit Beersheba, about 25 miles from Gaza. While Israeli forces have stormed into the northeastern area of the Strip, from where Hamas usually launches its projectiles, the Islamists have maintained their fire from within Gaza City.

Many analysts believe that Hamas wants to goad Israel into its stronghold, a hellish landscape for urban combat, which the Islamists have had 18 months to prime with booby traps, ambushes and tunnels.

The Israeli newspaper Haaretz reported that Israeli soldiers raided the house of a Hamas militant only to find three tunnels underneath through which their quarry escaped. It added that Hamas’s reports of kidnapping an Israeli soldier stemmed from an incident in which the soldier became separated from his unit and the militants tried to drag him down a tunnel. He escaped after a scuffle, it said.

Mr Sarkozy, part of a high-level EU effort in the region to negotiate a truce, told Israel that “the violence must halt”. Mahmoud Abbas, the Palestinian President and Fatah leader, whom he met in Ramallah yesterday, also called for an unconditional truce.

Mr Sarkozy ran foul of Hamas when he said that it must bear most of the blame for the increasingly miserable plight of the 1.5 million Gazans it rules over. “Hamas acted in an irresponsible and unforgiveable manner . . . Hamas is to blame for the suffering of the Palestinians,” he said. A Hamas spokesman accused Mr Sarkozy of “total bias” towards Israel.

Casualty figures

550 Palestinians have been killed in Operation Cast Lead

100 of the dead are children

2,500 Palestinians have been wounded

4 Israeli civilians have been killed since the operation began, and four Israeli soldiers. Seventy-seven soldiers have been injured

Source: Gaza medical services, Israel Defence Forces

Hamas: Israel has legitimised the killing of its children – Times Online