Abir Dandis, the mother of the two girls who were murdered in the Negev town of Al-Fura’a last week, couldn't find a police officer to listen to her warnings, neither in Arad nor in Ma’ale Adumim. Both police stations operate in areas where Israel wants to gather the Bedouin into permanent communities, against their will, in order to clear more land for Jewish communities. The dismissive treatment Dandis received shows how the Bedouin are considered simply to be lawbreakers by their very nature. But as a resident of the West Bank asking for help for her daughters, whose father was Israeli, Dandis faced the legal-bureaucratic maze created by the Oslo Accords.

The Palestinian police is not allowed to arrest Israeli civilians. It must hand suspects over to the Israel Police. The Palestinian police complain that in cases of Israelis suspected of committing crimes against Palestinian residents, the Israel Police tend not to investigate or prosecute them.

In addition, the town of Al-Azaria, where Dandis lives, is in Area B, under Palestinian civilian authority and Israeli security authority. According to the testimony of Palestinian residents, neither the IDF nor the Israel Police has any interest in internal Palestinian crime even though they have both the authority and the obligation to act in Area B.

The Palestinian police are limited in what it can do in Area B. Bringing in reinforcements or carrying weapons in emergency situations requires coordination with, and obtaining permission from, the IDF. If Dandis fears that the man who murdered her daughters is going to attack her as well, she has plenty of reason to fear that she will not receive appropriate, immediate police protection from either the Israelis or the Palestinians.

Dandis told Jack Khoury of Haaretz that the Ma’ale Adumim police referred her to the Palestinian Civil Affairs Coordination and Liaison Committee. Theoretically, this committee (which is subordinate to the Civil Affairs Ministry) is the logical place to go for such matters. Its parallel agency in Israel is the Civilian Liaison Committee (which is part of the Coordination and Liaison Administration - a part of the Civil Administration under the Coordinator of Government Activities in the Territories).

In their meetings, they are supposed to discuss matters such as settlers’ complaints about the high volume of the loudspeakers at mosques or Palestinians’ complaints about attacks by settlers. But the Palestinians see the Liaison Committee as a place to submit requests for permission to travel to Israel, and get the impression that its clerks do not have much power when faced with their Israeli counterparts. In any case, the coordination process is cumbersome and long.

The Palestinian police has a family welfare unit, and activists in Palestinian women’s organizations say that in recent years, its performance has improved. But, as stated, it has no authority over Israeli civilians and residents. Several non-governmental women’s groups also operate in the West Bank and in East Jerusalem, and women in similar situations approach them for help. The manager of one such organization told Haaretz that Dandis also fell victim to this confusing duplication of procedures and laws. Had Dandis approached her, she said, she would have referred her to Adalah, the Legal Center for Arab Minority Rights in Israel, which has expertise in navigating Israel’s laws and authorities.

John Kerry revealed his long-awaited plan for peace in the Middle East on Sunday, hinging on a $4bn (£2.6bn) investment in the Palestinian private sector.

The US secretary of state, speaking at the World Economic Forum on the Jordanian shores of the Dead Sea, told an audience including Israeli president Shimon Peres and Palestinian leader Mahmoud Abbas that an independent Palestinian economy is essential to achieving a sustainable peace.

Speaking under the conference banner "Breaking the Impasse", Kerry announced a plan that he promised would be "bigger, bolder and more ambitious" than anything since the Oslo accords, more than 20 years ago.

Tony Blair is to lead a group of private sector leaders in devising a plan to release the Palestinian economy from its dependence on international donors. The initial findings of Blair's taskforce, Kerry boasted, were "stunning", predicting a 50% increase in Palestinian GDP over three years, a cut of two-thirds in unemployment rates and almost double the Palestinian median wage. Currently, 40% of the Palestinian economy is supplied by donor aid.

Kerry assured Abbas that the economic plan was not a substitute for a political solution, which remains the US's "top priority".

Peres, who had taken the stage just minutes before, also issued a personal plea to his Palestinian counterpart to return to the negotiations.

"Let me say to my dear friend President Abbas," Peres said, "Should we really dance around the table? Lets sit together. You'll be surprised how much can be achieved in open, direct and organised meetings."

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly lit road, sometimes stopping to check the ripeness of fruits and vegetables, or ordering meat in near-empty butcher shops.

“All the shops are closed. I’m the only one open. This used to be the best place,” said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family’s home in the Muslim quarter of Jerusalem’s Old City.

Amidst the brightly coloured scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops of Jerusalem’s historic Old City, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret told IPS that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

“I only have this shop,” he said. “There is no other work. I’m tired.”

Abed Ajloni, the owner of an antiques shop in the Old City, owes the Jerusalem municipality 250,000 Israeli shekels (68,300 U.S. dollars) in taxes. He told IPS that almost every day, the city’s tax collectors come into the Old City, accompanied by Israeli police and soldiers, to pressure people there to pay.

“It feels like they’re coming again to occupy the city, with the soldiers and police,” Ajloni, who has owned the same shop for 35 years, told IPS. “But where can I go? What can I do? All my life I was in this place.”

He added, “Does Jerusalem belong to us, or to someone else? Who’s responsible for Jerusalem? Who?”

Illegal annexation

Israel occupied East Jerusalem, including the Old City, in 1967. In July 1980, it passed a law stating that “Jerusalem, complete and united, is the capital of Israel”. But Israel’s annexation of East Jerusalem and subsequent application of Israeli laws over the entire city remain unrecognised by the international community.

Under international law, East Jerusalem is considered occupied territory – along with the West Bank, Gaza Strip and Syrian Golan Heights – and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Jerusalem has historically been the economic, political and cultural centre of life for the entire Palestinian population. But after decades languishing under destructive Israeli policies meant to isolate the city from the rest of the Occupied Territories and a lack of municipal services and investment, East Jerusalem has slipped into a state of poverty and neglect.

“After some 45 years of occupation, Arab Jerusalemites suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Jerusalem and Israel to the west,” the International Crisis Group recently wrote.

Israeli restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of an eight-foot-high separation barrier between and around Palestinian neighbourhoods and the creation of a permit system to enter Jerusalem have all contributed to the city’s isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, Israel closed an estimated 26 organisations, including the former Palestinian Liberation Organisation headquarters in Jerusalem, the Orient House and the Jerusalem Chamber of Commerce.

Extreme poverty

Israel’s policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighbourhoods on the other side of the wall. Many Palestinian Jerusalemites also prefer to do their shopping in the West Bank, or in West Jerusalem, where prices are lower.

While Palestinians constitute 39 percent of the city’s population today, almost 80 percent of East Jerusalem residents, including 85 percent of children, live below the poverty line.

“How could you develop [an] economy if you don’t control your resources? How could you develop [an] economy if you don’t have any control of your borders?” said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in Jerusalem, of “this kind of fragmentation, checkpoints, closure”.

“Without freedom of movement of goods and human beings, how could you develop an economy?” he asked.

“You can’t talk about independent economy in Jerusalem or the West Bank or in all of Palestine without a political solution. We don’t have a Palestinian economy; we have economic activities. That’s all we have,” Odeh told IPS.

Israel’s separation barrier alone, according to a new report by the United Nations Conference on Trade and Development (UNCTD), has caused a direct loss of over one billion dollars to Palestinians in Jerusalem, and continues to incur 200 million dollars per year in lost opportunities.

Israel’s severing and control over the Jerusalem-Jericho road – the historical trade route that connected Jerusalem to the rest of the West Bank and Middle East – has also contributed to the city’s economic downturn.

Separation of Jerusalem from West Bank

Before the First Intifada (Arabic for “uprising”) began in the late 1980s, East Jerusalem contributed approximately 14 to 15 percent of the gross domestic product (GDP) in the Occupied Palestinian territories (OPT). By 2000, that number had dropped to less than eight percent; in 2010, the East Jerusalem economy, compared to the rest of the OPT, was estimated at only seven percent.

“Economic separation resulted in the contraction in the relative size of the East Jerusalem economy, its detachment from the remaining OPT and the gradual redirection of East Jerusalem employment towards the Israeli labour market,” the U.N. report found.

Decades ago, Israel adopted a policy to maintain a so-called “demographic balance” in Jerusalem and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, Israel built numerous Jewish-Israeli settlements inside and in a ring around Jerusalem and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Jerusalem residency rights live on the other side of the separation barrier and must cross through Israeli checkpoints in order to reach Jerusalem for school, medical treatment, work, and other services.

“Israel is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools,” explained Ziad al-Hammouri, director of the Jerusalem Centre for Social and Economic Rights (JCSER).

Al-Hammouri told IPS that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. “Taxation is an invisible tool…as dangerous as revoking ID cards and demolishing houses,” he said. “Israel will use this as pressure and as a tool in the future to confiscate these shops and properties.”

Egyptian officials yesterday launched a public relations offensive aimed at defending the government’s policies towards the Gaza Strip and tempering growing criticism of its handling of the two-week-long conflict.

In a press conference organised by the state information service, officials sought to present “Egypt’s position on the situation in Gaza and the Rafah border”, and distributed a 16-page pamphlet with further elaboration in an explicit effort to answer criticism of the government’s tepid response in the early days of the Gaza conflict, as well as to tout recent efforts to broker a ceasefire between Israel and Hamas.

“My job here is to put parameters on Egypt’s position on Gaza,” Abdel Moneim Saeed, a leading member and political intellectual with the ruling National Democratic Party, said at the press conference held at the information ministry. “Egypt has succeeded in the past two weeks of attempting to build a regional and international coalition of a set of ideas.

“We are talking with both sides about how to implement the Egyptian initiative. Egypt will continue its efforts for the Palestinians, Israelis and mostly for Egyptians,” Mr Saeed said, stressing that a ceasefire was needed because “there is no military solution”.

A Franco-Egyptian proposal last week called for a ceasefire for a specified period, opening Gaza’s border crossings, preventing arms smuggling into the territory and inviting Palestinian factions to reconciliation talks. A UN Security Council resolution passed on Thursday called for a ceasefire.

Israel and Hamas have rejected both proposals.

“There is no way Israel will be able to suppress the Palestinian people and no way Hamas would be able, with few rockets, to overcome the severe imbalance of power and eject Israelis from the land of Palestine,” Mr Saeed stressed.

He said “the original sin is the continuation of occupation of the land” and emphasised that Egypt would continue to work “with persistence and resilience with both sides”.

On Saturday, in a nod to its traditional diplomatic role, Egypt hosted talks between the Egyptian and Palestinian presidents, as well as between two Hamas groups who met with Egypt’s intelligence chief.

Amos Gilad, the head of the Israeli defence ministry’s Diplomatic-Security Bureau, is also expected in Egypt again today after meeting with Egyptian officials last week.

Still, the officials stressed that any dialogue with Hamas does not signal a political opening with the group.

“Egypt is not expressing a love affair with Hamas but for Gaza and the Palestinians’ sake,” Mr Saeed stressed.

Egypt has never welcomed Hamas, which came to power in Gaza via elections in 2006. Egypt is battling the Muslim Brotherhood, the oldest and largest Islamic opposition group, which is the inspiration of all Islamist movements in the region.

Harsh criticism of the regime over the past two weeks has centred on Egypt’s reticence to open its border with Gaza, prompting some extreme elements to accuse it of collusion with Israel.

Israel, meanwhile, has criticised it for not shuttering tunnels from Egypt into Gaza used to smuggle in supplies and possibly arms.

“Egypt has never, ever participated or co-operated in the siege of Gaza,” said Mohammed Bassiouny, the former Egyptian ambassador to Israel, at the press conference. “There is only one crossing point between Egypt and Gaza; however, there are six crossing points between Israel and Gaza. “Be sure we’re against the tunnels because everyone is keen on security and sovereignty at its border.”

Egypt, he said, got US$25 million (Dh92m) last year from the United States to detect the tunnels.

Israeli officials have openly criticised Hosni Mubarak, the Egyptian president, for not doing enough to close or destroy the tunnels.

But the last three terrorist attacks that struck Sinai were carried out by terrorists trained in Gaza and who came to Egypt via the tunnels, Mr Saeed said, “so the threat goes both ways”.

Under a 2005 deal, the Rafah crossing with Gaza can only be opened to normal traffic if EU observers and Palestinian Authority forces are at the border. But Hamas ousted forces loyal to Mahmoud Abbas, the Palestinian president, from the Gaza Strip in June 2007 and the EU monitors subsequently left.

Since then, Israel imposed a blockade on Gaza and Egypt, under international pressure, reinforced it.

Mr Saeed defended Egypt’s brief opening of the crossing to allow humanitarian supplies and injured to cross through, despite violating the agreement preventing it from keeping the border open. Egypt is not party to the 2005 border agreement, so actually is not breaching it by letting humanitarian aid, he said.

About 290 wounded have crossed into Egypt via the Rafah border crossing along with 144 of their relatives and are being treated in hospitals. There are up to 2,000 beds for the Palestinian wounded, said Nasser Rasmy, an assistant to the Egyptian health minister.

He added that about 175 volunteer doctors were at the border eager “help the exhausted doctors in Gaza”, but “they are not passing because of the vulnerability of the security situation in Gaza.”

Cairo, Egypt - Babies have been named "Hezbollah" and "Nasrallah." Even some die-hard secularists are praising the Shiite fundamentalist militia in the wake of its cease-fire with Israel — saying its fighters restored their feelings of honor and dignity.

But behind the outpouring of support for Hezbollah in recent days, some in the Middle East are increasingly worried about the rising power of religious extremists.

"The last thing I expected is to fall in love with a turbaned cleric," wrote Howeida Taha, a strongly secular columnist in Egypt, in the Al-Quds al-Arabi newspaper this week. "I don't like them, and of course they will never like somebody like me, (but) I feel I've been searching for Nasrallah with my eyes, heart and mind. I feel Nasrallah lives within me."

Yet, she added, "No matter how much we admire Hezbollah's fighters' bravery, the last thing we want to see is the rise of a religious party in Egypt."

Around the Arab world, Hezbollah was widely seen as the victor in the 34-day war with Israel, because of the tougher-than-expected resistance it put up under Israel's relentless bombardment and heavy ground assaults.

As a result, Hezbollah and its leader, Sheik Hassan Nasrallah, have emerged as popular heroes.

"Thanks be to God and to Hezbollah," read the banner of an opposition independent weekly, Al-Destour, in Egypt on Wednesday.

More than 120 babies born during the war have been named after Nasrallah in the Egyptian city of Alexandria, according to the official registrar there. In Gaza City, there are at least a dozen newborns named Hezbollah, (Party of God) Nasrallah (Victory from God) or Hassan.

On an Islamist Web site for youth, based in Egypt, many women wrote saying they would love to marry someone like Nasrallah.

"I want to marry one of Nasrallah's three boys and dedicate myself to resistance and pride of my (Islamic) community," said Noha Hussein, a university student in Cairo.

Necklaces and key chains with his image are now in style, the Web site notes.

Much of the enthusiasm has come from finally seeing an Arab military force dig in against Israel.

Arab nations fought several wars with Israel — in 1948, 1956, 1967 and 1973, as well as Israel's previous two invasions of Lebanon. The first three were heavy defeats for Arab armies, and though Egypt's army saw dramatic successes in 1973, the battle had swung to Israel's favor by the time it ended.

In the eyes of many Arabs, Hezbollah's performance shook the Israeli military's image of invulnerability.

"The Lebanese people may have lost a lot of economic and human resources, but away from figures and calculations, they have achieved a lot of gains," said Youssef al-Rashed, a columnist for the Kuwaiti daily Al-Anba.

Lebanon's "heroic resistance fighters have proven to the world that Lebanese borders are not open to Israeli tanks without a price," he wrote Tuesday. "Lebanon was victorious in the battle of dignity and honor."

Also, the image of a guerrilla force doing what a regular army could not has apparently deepened the popular resentment toward Arab governments.

"The crux of the problem in Lebanon is that a political movement became bigger than the state," said Maamoun Fandy, the director of the Middle East program at London's International Institute for Strategic Studies. "The same syndrome — a perceived lack of legitimacy of governments that are being challenged by armed political movements — can be seen in many Arab and Muslim states. Their message is that movements can do what states failed to do, and can restore the honor that governments have squandered."

Awni Shatarat, a Palestinian refugee from Baqaa camp, is among those who strongly view Hezbollah as victorious.

"Israel was defeated by a small group, which succeeded in demolishing the image of the undefeatable army," he said.

But others are far more critical of Hezbollah and pessimistic about what the war might bring.

Jordan's former information minister, Saleh Qallab, said Hezbollah's new strength could now be turned against the anti-Syrian, pro-democracy movement that gained power in Lebanon last year — "which means that a civil war is imminent in Lebanon, unless a miracle occurs."

"Do we call this a victory?" he said.

Cairo, Egypt -- As their anger against Israel and America swells, protesters across the Middle East are also increasingly venting their frustration at their Arab rulers, especially in moderate countries whose governments have been reliable U.S. allies.

Nearly four weeks of fighting between Hezbollah and Israel have aggravated a summer of discontent over the bloodshed in Iraq, stalled democratic reforms and price increases. Angry at their governments, demonstrators are praising a new hero: Hezbollah leader Sheik Hassan Nasrallah.

"The whole region has been engulfed in anger since the war on Iraq more than three years ago," said Diaa Rashwan, an Egyptian analyst with the Al-Ahram Center for Political and Strategic Studies. "The frustration is just huge."

The rising resentment is weighing heavily on Arab leaders as their foreign ministers gather in Beirut on Monday for an emergency meeting. Moderates like Egypt, Jordan and Saudi Arabia may want a halt to the fighting, but they can't be seen as backing a U.S.-promoted cease-fire plan that Hezbollah has depicted as a surrender.

Even more worrisome for Arab leaders is the possibility violence may turn on them. On Saturday, al-Qaida announced that an Egyptian militant group had joined the terror network. While the group denied it, many fear that public anger could nonetheless boost militants around the region.

Demonstrators have denounced leaders of Egypt, Jordan and Saudi Arabia for blaming Hezbollah _ sometimes implicitly, sometimes overtly _ for starting the fighting by snatching two Israeli soldiers in a July 12 cross-border raid.

Three straight days of protests broke out last week among the normally quiet Shiite minority in Saudi Arabia, where demonstrations are rare, though protesters were cautious not to criticize the ruling family. Hundreds of Shiites waved posters of Nasrallah, chanting "Oh Nasrallah; oh beloved one; destroy, destroy Tel Aviv."

Cairo has seen nearly daily demonstrations against Egyptian President Hosni Mubarak for what protesters see as his failure to support Hezbollah. On Sunday, demonstrators held up a poster of Mubarak with a Star of David on his forehead, labeling him "the enemy of the Egyptian people."

Last week, more than 1,000 protesters rallied in downtown Cairo, burning Israeli and American flags. "Arab majesties, excellencies and highnesses, we spit on you," one banner read.

Similar protests have erupted in Jordan and Kuwait, where anti-U.S. demonstrations are rare.

Lebanon may be the spark, but there's plenty of tinder for the discontent, particularly the situation in Iraq and domestic economic strains.

Iraq's unity government has been unable to curb mounting sectarian violence since it took power in May. A U.N. report said that nearly 6,000 civilians were killed across Iraq in May and June.

Late last month, the Egyptian government reduced subsidies on gas, and the price at the pump jumped 30 percent from 65 to 84 cents a gallon. Subway fares went up from 13 cents to 17. The hikes angered many in a country where the average income is less than $1,400 a year.

Egypt's "regime stabbed the Lebanese and burned the Egyptians by raising prices of gasoline," read a headline of the opposition weekly Sawt El-Umma.

Egyptian officials say the country's economy is growing at a rate of 5 percent, but they acknowledge the benefits haven't reached most of the population. The subsidy cuts were part of budget tightening the government says focuses subsidies on the most needy.

Cash-strapped Jordan is wrestling with rising commodity prices after three consecutive fuel price hikes in the past year.

"Who cares about democracy while struggling for food and butter for their children?" said Mustafa Qabbani, a 35-year-old Jordanian hotel receptionist and father of three.

"We live in a state of nonstop worry about our future in a war zone," said construction engineer Bassam Awad, 39.

The Shiite cleric Nasrallah has emerged as a hero, even among some secular Sunnis in Egypt and Jordan. In Egypt, protesters and opposition newspapers compare him with the late Egyptian President Gamal Abdel Nasser, the Arab nationalist champion against Israel.

"Nasser 1956, Nasrallah 2006: We will fight and never surrender," read one headline in a weekly newspaper run by the Nasserist party in Egypt _ referring to Nasser's 1956 war with Israel, France and Britain. Nasrallah means "victory from God" and Nasser is "the victorious."

Some find the lionizing of the guerrillas alarming.

"Hezbollah took Lebanon hostage, and then came the tragedy we all know," wrote Lebanese columnist Dalal al-Bizri in the pan-Arab daily Al-Hayat on Sunday. "Ironically, as the number of victims increases, the party becomes more popular."

CAIRO - Israel and Egypt are close to an agreement on Egyptian security presence along their border as Israelis prepare to remove settlements from Gaza and return the area to Palestinian control, officials said Monday.

Under a proposal, Egypt would send 200 Egyptian military experts into the Gaza Strip to aid Palestinian officials, said the Israeli officials who visited Egypt.

"We're now very close to implement this understanding between Israel and Egypt," Foreign Minister Silvan Shalom told reporters Monday — a day after the Israeli Cabinet approved in principle Prime Minister Ariel Sharon 's plan to withdraw from the Gaza Strip by 2005.

Amira Aron, an Israeli Foreign Ministry official, told The Associated Press that the agreement would put an additional 100 Egyptian police along the Egyptian side of the border.

The agreement, she said, also involved Egypt sending 200 military experts into Gaza to help Palestinians in organizing their security services.

Mohammed Bassiouni, a former Egyptian ambassador to Israel, told AP that what Aron referred to as 100 additional police officers would likely be soldiers or special forces carrying heavier weapons than the light arms now carried by Egyptian policemen in the border region.

Bassiouni, a member of Egypt's parliament, said Egypt has 19,000 soldiers and 3,000 policemen in Sinai.

Egyptian officials familiar with the talks said discussions centered on shifting 1,000 border guards already in the Sinai peninsula north, closer to the border.

The Egyptians also want an international presence in Gaza, the nature of which is under discussion, the Egyptian officials said on condition of anonymity.

After meeting with Shalom, Egyptian presidential adviser Osama El-Baz said: "We have a certain vision about the role that Egypt could take to improve the situation so there would be stability in the Palestinian territories."

Egyptians and other Arabs, frustrated by violence in the Palestinian areas, have criticized Egypt for working with Israel on security issues.

"What is exactly going on?" Abdallah El-Senawi, editor of the Egyptian opposition weekly Al-Arabi, wrote on Sunday.

Egypt withdrew its ambassador from Tel Aviv shortly after intense Palestinian-Israeli clashes erupted in late 2000, accusing Israel of unnecessarily harsh measures against the Palestinians. The ambassador has yet to return.

Editor’s Note: Cairo-based Associated Press reporter Salah Nasrawi contributed to this story.