Observers of the process note that Netanyahu is the first Israeli prime minister to offer to leave some of their recent settlements as part of the process of establishing a Palestinian state. In President Obama's speech these were called "mutual swaps of land."

These swaps need not entail the evacuation of large populations or numerous settlements but rather create Israeli and Palestinian pockets that would remain in situ in each other's territories under the "sovereign symbols" of the opposite party, Israeli or Palestinian.

The President also asked for two concessions that Israelis feel they can not accept: That Israel would have no military presence outside of the new borders, and that part of the land swap would come from Israel's pre-1967 sovereign land.

Canada's right-leaning Conservative government has adopted a staunchly pro-Israel position in international negotiations since coming to power in 2006, with Prime Minister Stephen Harper saying Canada will back Israel whatever the cost.

Sitting beside Obama following a private Oval Office meeting, the visiting prime minister said Friday that he values the president's efforts ... But he said the president's call for Israel to pull back to the borders that existed before the Six-Day War is not tenable.

Obama, in a sweeping address tackling the uprisings in the Middle East and the stalled peace process, stunned Washington and Jerusalem Thursday by endorsing Palestinians' demand for their own state based on the pre-1967 borders.

President Obama's speech did include some statements that bolster Israel's position. He claimed that the United States' commitment to Israeli security is "unshakable." He also said that Israel's right to defend itself will remain paramount. He said that the recent agreement between Fatah and Hamas was a problem because the U.S. considers Hamas a terrorist organization. He publicly disagreed with recent Palestinian plans to ask the U.N. to recognize them as an independent state if the peace process has not succeeded at that time.

In his speech the President also said that the "future of Jerusalem" and the fate of Palestinian refugees remains to be worked out.

Obama will call on Jerusalem and Ramallah to reignite the stalled Israeli-Palestinian peace process, saying it is the only way to achieve viable peace.

Prime Minister Benjamin Netanyahu... ordered the military to act with "maximum restraint" but vowed a tough response to further provocations.

"Nobody should be mistaken. We are determined to defend our borders and sovereignty," he declared.

As a matter of fact the call for a third intifada has been resonating inside Israel itself and specifically from the Israeli Knesset as Hanin Zoabi, a member of the Knesset representing the Balad party called for a third intifada against Israel.

Palestinian leaders plan to ask the United Nations General Assembly in September to recognize a Palestinian state in all the lands Israel occupied in 1967.

"What happened today in Cairo is a tremendous blow to peace and a great victory for terrorism," he told reporters during a visit to London.

Hamas Prime Minister Ismail Haniyeh on Monday condemned the killing of bin Laden, whom he hailed as a Muslim mujahed [warrior] and Arab human being. He also told reporters in Gaza City that the killing of bin Laden came in the context of the United States’ policy of killing and repression.

People responding to the poll showed overwhelming approval of the Egyptian army, which is in the control of the country until new government officials can be properly elected.

The conservative Islamist Muslim Brotherhood and the largely secular April 6 movement - two groups closely involved in the uprising, had the highest approval ratings in society, with over 70 percent seeing them in a very or somewhat favorable light.

Peace talks opened last September with the aim of an accord in one year but quickly broke down after Israeli Prime Minister Benjamin Netanyahu refused to extend a partial freeze on Jewish settlement building in the occupied West Bank.

That would require convincing the United States not to veto a resolution supporting membership for an independent Palestinian state, which won't be easy.

"The [$75 million - 260 million shekel] budget the Finance Ministry asked for this morning at the Finance Committee for the Defense Ministry is not an addition to the defense budget, but an implementation of government decisions approved in the past," the Defense Ministry said.

In the absence of a promising peace plan, the Palestinian government plans to ask the U.N. General Assembly in September for recognition of statehood.

Hamas appears to have agreed to the ceasefire because of Israel's tough response and the success of its Iron Dome missile defense system. The Iron Dome's debut on the battlefield was successful, intercepting 100 percent of the longer-range Grad-type missiles launched.

"The idea here is to attack Israeli population centers from Hezbollah population centers, to attack our population centers in order to terrorize and discourage us to fire... to use their own population as a human shield."

In response to this threat, the IDF held military drills to simulate a war with Hezbollah and Syria on its northern border, Hamas on its southern border, and the involvement of Iran.

A way must be found for Jerusalem to emerge as a capital of two States, Israel and Palestine, with arrangements for holy sites acceptable for all.

The IDF is due to deploy for the first time a battery of the Iron Dome defense system around Gaza. However the move has only limited defense capabilities since one battery can only cover a limited area. T

At least 25 people were wounded in the incident, four of them seriously. The casualties were being evacuated to the Hadassah Hospital in Ein Karem. The Magen David Adom emergency services said that there were no fatalities.

The representatives said that the differences between the two sides were far too wide to get negotiations back on track.

"On the boat we discovered many weapons destined for terror groups in the heart of Gaza," said Israeli Prime Minister Benjamin Netanyahu. The source of the weapons was Iran which is trying to arm the Strip."

"And with small groups of about 40 to 50 well-trained and well-equipped fighters, they can take control, and force a siege on the entire area making close combat impossible for Israel."

Gaza sources said the RPG set the vehicle on fire, but military spokesmen said there was no damage and that no one was injured. Hamas sources also reported that the IDF retaliated with artillery fire, wounding one terrorist.

"Of course, Israel would prefer final status peace agreement, but that has become all but impossible because of the Palestinian refusal to negotiate," the government official said.

The occupants of the Beersheba home... saved themselves by using the seconds between the warning siren and the explosion to take shelter in a bomb-proof room.

Israel has learned that the Iranian cruiser Kharg is carrying long-range missiles for Hizballah which it plans to unload at a Syrian port or Beirut harbor.

US Ambassador to the United Nations Susan Rice told council members that the veto "should not be misunderstood to mean we support settlement activity." ... But she said the draft "risks hardening the position of both sides."

Obama made it clear to Abbas that the US would veto such a resolution, so as not to jeopardize efforts to resume peace talks between Israel and the Palestinians.

He also made note of what he characterized as the "fascinating phenomenon" whereby power is shifting to the people of the region thanks to online social networks.

"The dramatic events of the recent period make it necessary for us to take the Israeli-Palestinian conflict off the regional agenda. We must do this as soon as possible because the conflict is being exploited to the detriment of all sides."

"After President Mubarak steps down and a provisional government is formed, there is a need to dissolve the peace treaty with Israel," al-Bayoumi said.

Similar protest have recently forced the president of Tunisia from power and have caused a week of change in Egypt.

Demonstrators also have called for change in Algeria, Sudan and Yemen. Protest organizers have called for a demonstration this week in Syria.

He added that “the people should be prepared for war against Israel,” saying the world should understand that “the Egyptian people are prepared for anything to get rid of this regime.”

The Obama administration's support for the unrest is strikingly reminiscent of Jimmy Carter's support of the Islamic Revolution in Iran in 1979, which marked the birth of modern Islamist expansion now seemingly sweeping the Mideast.

At least three protesters and one policeman have died in the violence thus far. Police have beaten protesters and journalists alike and dispersed the crowds with water cannons, tear gas and rubber bullets. Over 860 protesters have been arrested since the riots began Tuesday.

Sunni Muslims loyal to outgoing premier Saad al-Hariri, Rafik's son who has Western and Saudi backing, staged a "day of rage" to protest the appointment of the Sunni billionaire Mikati, a centrist lawmaker with ties to Saudi Arabia and Syria.

"He [Abbas] is not threatening an intifada. We want negotiations. We want a Palestinian state through an agreement. But if there is no agreement or solution when September comes, the alternative may be a type of intifada."

Hizballah had been threatening to topple the government over a UN-backed probe into the 2005 assassination of former Prime Minister Rafik Hariri, amid reports that the investigation is set to indict Hizballah members.

Hezbollah ministers and their allies on Wednesday resigned from the Lebanese cabinet, in a move that could topple the unity government over a crisis linked to a UN probe into the murder of former premier Rafiq Hariri.

The move is part of the Palestinians' so-called Plan B of pursuing an alternative to a negotiated peace deal while talks with Israel remain stalled. Riad Malki's announcement Sunday followed Chile's recognition of Palestine, making it the fifth South American country to do so recently.