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The Iranian threat looms large before us, as was further demonstrated yesterday.  The greatest danger confronting Israel, the Middle East, the entire world and human race, is the nexus between radical Islam and nuclear weapons.

I turn to all Arab leaders tonight and I say: “Let us meet. Let us speak of peace and let us make peace. I am ready to meet with you at any time.  I am willing to go to Damascus, to Riyadh, to Beirut, to any place- including Jerusalem.I call on the Arab countries to cooperate with the Palestinians and with us to advance an economic peace.

The economic success of the Gulf States has impressed us all and it has impressed me. I call on the talented entrepreneurs of the Arab world to come and invest here and to assist the Palestinians – and us – in spurring the economy.

Israeli Prime Minister Benjamin Netanyahu has announced he will back a Palestinian state - but only if it is completely demilitarised.He said a Palestinian state must have no army, no control of its air space and no way of smuggling in weapons. In a landmark speech, weeks after the US president urged him to agree a two-state plan, he said the Palestinians must accept Israel as a Jewish state. Palestinian leaders reacted angrily, accusing him of sabotaging peace plans.

our correspondent says the question is whether the White House regards this as sufficient to make up for the lack of movement on the issue of Jewish settlements in the occupied West Bank.

But in his speech at Bar-Ilan university Mr Netanyahu said settlers were not "enemies of peace" and did not move from his position of backing "natural growth" in existing settlements.

Israel to propose removing some West Bank settlements Barak hopes dismantling two dozen small outposts will win US support for more expansion in main areas Buzz up! Digg it Rory McCarthy in Jerusalem guardian.co.uk, Tuesday 26 May 2009 11.52 BST Article history Israel is to propose removing two dozen Jewish settlement outposts in the occupied West Bank in the hope of winning US support for the continued expansion of its main settlements, reports said today.

Ehud Barak, the Israeli defence minister, will take the proposal to senior US administration officials in Washington next week, the Associated Press said.

Netanyahu held what was apparently a tense meeting with members of his Likud party yesterday and told them that Israel needed to make some compromise over its settlement-building enterprise in order to encourage Washington to take a tougher stance on Iran and its nuclear programme.

Barak is expected to propose a temporary and partial freeze on the construction of homes for Jews in the West Bank. That falls far short of Barack Obama's demand made to the Israeli prime minister, Binyamin Netanyahu, at a difficult meeting in Washington last month for a complete halt to building as evidence of a commitment to the creation of a Palestinian state

Tel Aviv newspapers reported Israeli officials as saying that Barak would meet Obama's Middle East envoy, George Mitchell, in New York tomorrow to propose a three-month freeze on construction in settlements outside Jerusalem.

Israel is using its rapid construction programme to surround Jerusalem with Jewish housing and separate Arab districts from the rest of the occupied territories.If construction work continues it is not only likely to surround Jerusalem with Israeli housing but result in a Jewish majority in the east of the city which Israel would use to buttress its claim over all of Jerusalem at peace talks.

Although it’s hard to realize after the horrors we’ve just witnessed, the state of war between the Jews and Palestinians has not always existed. In fact, many of the divisions between Jews and Palestinians are recent ones. The very name “Palestine” was commonly used to describe the whole area, even by the Jews who lived there, until 1948, when the name “Israel” came into use.

The basis for the modern State of Israel is the persecution of the Jewish people, which is undeniable. The Jews have been held captive, massacred, disadvantaged in every possible fashion by the Egyptians, the Romans, the English, the Russians, the Babylonians, the Canaanites and, most recently, the Germans under Hitler. The Jewish people want and deserve their homeland.

But the Palestinians too have a history of persecution, and they view the coastal towns of Haifa, Acre, Jaffa and others as the land of their forefathers, passed from generation to generation, until only a short time ago.

Prime Minister Benjamin Netanyahu's declaration of support for limited Palestinian statehood in a key speech Sunday laid bare Palestinian rejectionism, Vice Premier Moshe Ya'alon said Monday. "I agree with what was said," Ya'alon, who is also strategic affairs minister, told Army Radio. "I know this reality well; I think there was a very important statement that formulated the internal Israeli consensus in the face of Palestinian rejectionism."

In the speech, Netanyahu said Israel would agree to the establishment of a Palestinian state on the condition that it was demilitarized and that the Palestinians recognized Israel as the state of the Jewish people.

Ya'alon, a former Israel Defense Forces chief of staff who opposed Israel's 2005 pullout from the Gaza Strip, added that the debate over whether Netanyahu had supported a two-state solution to the Israeli-Palestinian conflict before the speech was unnecessary, as being merely over semantics

Construction has begun on approximately 60 new homes in a Jewish settlement in Israeli-occupied East Jerusalem, the Israeli campaign group Peace Now says. The work, in East Talpiot settlement, is aimed at creating a belt around East Jerusalem that would sever it from the rest of the West Bank, the group says.

Settlements on occupied land are illegal under international law. Israel disputes this and also argues that East Jerusalem is not subject to its pledge to freeze settlement work. Israel's claim is based on its annexation of East Jerusalem, unrecognised by the international community, which it captured along with the West Bank and other Arab territory in the 1967 war.

Israelis view settlements such as East Talpiot as neighbourhoods of Jerusalem. Such areas tend to be well integrated into the city's infrastructure.

Avigdor Lieberman, the outspoken far-right Israeli politician, is set to be appointed his country's next foreign minister in a new coalition deal.

Under the deal, agreed late on Sunday night, Lieberman would be both foreign minister and a deputy prime minister, giving him an important influence in shaping the new government's policies.

Both Netanyahu and Lieberman have stopped short of endorsing a two-state peace agreement with the Palestinians, which may set them at odds with the international community, particularly the Obama administration which has promised to "aggressively" pursue a lasting peace between Israel and the Palestinians.

Binyamin Netanyahu, Israel's next prime minister, was last night on the verge of forming a majority coalition after the Labour party agreed a last-minute deal to join his incoming government.

Netanyahu will be prime minister, with Lieberman as his foreign minister and Barak remaining as defence minister, where he was a key figure behind Israel's three-week war in Gaza.

Labour's central committee voted by 680 to 570 in favour of the deal, despite bitter divisions among the party hierarchy. Some at the meeting in Tel Aviv last night showed their frustration, shouting "disgrace" after the result was announced.Netanyahu already has Lieberman's Israel Our Home party on board, as well as the ultra-Orthodox Shas. Now with Labour he has a total of 66 seats - a majority in the 120-seat Knesset, Israel's parliament. However, it is unclear whether the seven Labour MPs who opposed Barak will accept the party's decision or rebel and refuse to support the government.

The Israeli military occupation around Bethlehem is severely restricting its growth, undermining its economy and compromising its future, according to a UN report.The combined effect of Israeli annexation, the West Bank barrier, settlements, settler bypass roads, closed military zones and Israeli nature reserves, has left only 13% of the 660 sq km Bethlehem governorate available for Palestinian use, the UN Office for the Co-ordination of Humanitarian Affairs says.

While there are about 175,000 Palestinians living in the Bethlehem area, there are now at least 86,000 Israelis also living there in 19 settlements, and their number is growing, even though settlements on occupied land are illegal under international law. Two-thirds of the governorate is under full Israeli security and administrative control.

The barrier around the Bethlehem area, part concrete, part steel, is still being built, but when finished will seal off the city itself from east Jerusalem and prevent growth to the north and west. On the western side of the barrier about 64 sq km will be isolated, home to 21,000 Palestinians living in some of the most fertile agricultural land in the area. The Palestinians there will face reduced access to trading markets and health and education services.

Iran's President Mahmoud Ahmadinejad has returned home to what has officially been described as a sensational welcome. This follows his controversial speech at a UN anti-racism conference.

European delegates walked out when he described Israel as a racist state. France called his address a "hate speech", while the US called it "vile". Some countries had boycotted the conference because the Iranian president was appearing. But Iranian state media described Mr Ahmadinejad as the superstar of the conference.

One pro-government paper said the president had shot the last bullet into the brain of the West.

The United Nations has called on Israel to end its programme of demolishing homes in east Jerusalem and tackle a mounting housing crisis for Palestinians in the city.

Dozens of Palestinian homes in east Jerusalem are demolished each year because they do not have planning permits. Critics say the demolitions are part of an effort to extend Israeli control as Jewish settlements continue to expand

Although Israel's mayor of Jerusalem, Nir Barkat, has defended the planning policy as even-handed, the US secretary of state, Hillary Clinton, in March described demolitions as "unhelpful". An internal report for EU diplomats, released earlier and obtained by the Guardian, described them as illegal under international law and said they "fuel bitterness and extremism". Israel occupied east Jerusalem in the 1967 war and later unilaterally annexed it, a move not recognised by the international community.

He is trying to convince the Labour Party to join, correspondents say. If he fails to do so, they say, he will be forced to form a narrow coalition with hard-line Israeli parties. The two-week extension sets 3 April as Mr Netanyahu's new deadline.

But Mr Netanyahu has also been seeking the support of the centrist Kadima party. If Kadima also joins the coalition line-up, party leader and current Foreign Minister Tzipi Livni could keep her position, although talks have so far proved inconclusive. Ms Livni has demanded Mr Netanyahu sign up to a two-state solution with the Palestinians before she joins the government.

If Kadima sees through its stated intention to lead the opposition, Likud is expected to try to bring in smaller hard-line parties like Jewish Home, National Union and United Torah Judaism. That would give it a solid right-wing majority of 65 in the 120-seat parliament.