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.”

In the afterglow of a high-profile peace conference, Israeli and Palestinian leaders will try in the coming year to resolve issues that have defied solutions for decades.

For peace to work, Israel will have to give up most of the West Bank, Palestinians must agree to resettle refugees inside their own state and the two sides must share the holy city of Jerusalem. None of that will come easily _ and prospects for peace are hurt by the growing power of extremists and the weakness of leaders on both sides.

Weighing heavily on the Middle East is fear about the influence of Iran and the ascendancy of Hamas militants in the Gaza Strip. After Hamas violently routed the more moderate Fatah movement in Gaza in June, the big question now is whether the West Bank will go the same way.

Israel fretted through a year of angst about Iran's nuclear program only to be told in a new U.S. intelligence report that Iran stopped it four years ago. Israel isn't buying the claim, and is scrambling to convince its allies that Iran remains a major threat to the West.

Hamas' takeover of Gaza paradoxically opened the door to peace talks between Israel and the moderate Palestinian leadership now in charge of the West Bank. Israeli and Palestinian leaders both say they hope to sign a peace deal by the end of 2008.

On Nov. 27, the two sides got together in Annapolis, Md., in the presence of some 45 nations _ including leading Arab states _ to relaunch peace talks that had been stalled during the past seven years of Israeli-Palestinian violence.

All the main players have good reason to go for a deal: Israeli Prime Minister Ehud Olmert wants to undo the damage done by his inconclusive 2006 war in Lebanon, Palestinian President Mahmoud Abbas needs a boost in his showdown with Hamas, President Bush would like to offset his difficulties in Iraq, and moderate Arab states need to counter Iranian-supported extremism.

Working against this new hope is weakness at the top: a Palestinian president who only controls half his territory and struggles to impose order in the part he does control, and an Israeli leader who has done little to confront domestic hawks intent on expanding West Bank settlements and torpedoing any progress toward peace.

While the contours of a peace deal have largely been worked out in past talks _ a Palestinian state in the West Bank and Gaza, shared control of Jerusalem and a recognition the need to settle the Palestinian refugees _ every issue calls for excruciating compromises.

Negotiators will have to figure out how to share Jerusalem, a task that must address key Israeli security concerns and religious sensitivities on both sides; and find a just solution for the Palestinian refugees displaced in Israel's 1948 war of independence without destroying the Jewish character of Israel.

Both Israelis and Palestinians have a growing sense that time is running out.

There will soon be more Muslims than Jews in the lands comprising historic Palestine, and Israel will have to make a deal if it hopes to remain both Jewish and democratic. And without peace, moderate Palestinians will likely lose their life-or-death struggle against the extremists.

"If things don't work out it means that the voices that are not in favor of ... a peaceful resolution of the conflict will feel vindicated and they will be strengthened and empowered," said independent West Bank lawmaker Hanan Ashrawi.

Israeli Cabinet Minister Ami Ayalon went further, saying that if peace talks fail "we shall see Hamas controlling the West Bank and the right wing will control Israel."

Israel might sign some sort of a peace treaty in the coming year. But it's highly unlikely the deal would be implemented unless Israel is assured that the lands it evacuates won't be used as launching grounds for attacks _ as happened after Israel withdrew from the Gaza Strip in 2005.

In hopes of bolstering Abbas' forces in the West Bank, the international community is expected to pledge almost $2 billion a year in aid for the next three years to help rebuild the Palestinian economy and security forces.

There are no clear plans for Hamas-ruled Gaza, which is internationally boycotted and can expect to remain almost completely isolated and slide deeper into poverty as long as the Islamic militants remain in power.

If the U.S. change of assessment on Iran was one year-end surprise, Syria is another.

The country has long been under U.S. pressure over its role in Lebanon and Iraq, and in September Israeli warplanes struck a site in Syria that some believe was a nascent secret nuclear site, an accusation denied by Damascus.

But Syria improved ties with the U.S. by attending the Annapolis conference, a thaw that U.S. officials hope will dilute Iran's influence in the region. Damascus, in turn, is hoping the next year will see a resumption of stalled negotiations with Israel over the disputed Golan Heights.

Israel keeps building settlements, Islamic militants are in control in Gaza and both the Israelis and the Palestinians have politically vulnerable leaders. All that will make it difficult to implement an agreement even if the two sides agree on a path to peace at a summit next month.

Weighing heavily on the U.S.-brokered summit is memory. Everyone remembers the steep price paid for the failure of the last round of peacemaking in 2001: thousands killed in years of Israeli-Palestinian fighting that broke out months after the talks fell apart.

This time, all the key players are eager to find something to show for themselves: Palestinian President Mahmoud Abbas in his showdown with the militants of Hamas, Israeli Prime Minister Ehud Olmert to save himself from the debacle of last year's war in Lebanon and President Bush to offset his troubles in Iraq.

Olmert told a parliamentary committee last week that if Israel can't make peace with the Palestinians' current moderate leadership _ President Abbas and U.S.-educated Prime Minister Salam Fayyad _ it won't be able to do it with anyone.

The Israeli leader said missing this opportunity will lead to killing for many years to come.

The sense of urgency was evident Monday during a fresh round of shuttle diplomacy by Secretary of State Condoleezza Rice. Shortly after she met with Abbas in the West Bank, Palestinian negotiators rushed to Jerusalem for an impromptu round of talks with their Israeli counterparts. Then Olmert, in a speech, suggested for the first time that Israel might give up some Arab neighborhoods of Jerusalem.

The chief Palestinian negotiator, Ahmed Qureia, had set an upbeat tone last week, telling The Associated Press: "I feel that there is a kind of new page that has been opened. There is trust building again."

But the challenges are enormous, topped as ever by the same two issues: violence and settlements.

Israel is unlikely to undertake the gargantuan task of uprooting tens of thousands of settlers from the West Bank unless Palestinian leaders guarantee the vacated territory won't become a launching ground for attacks _ as happened after Israel withdrew from Gaza in 2005.

Palestinians say Israel is jeopardizing the chances by expanding West Bank settlements, seizing more land for a West Bank road project and building a massive separation barrier that juts into territory Palestinians want for a future state.

Rice didn't mention those moves specifically during a news conference Monday, but clearly this is what she was talking about when she called on the parties to "avoid any steps that would undermine confidence."

In some of her most forceful comments to date, Rice said "it's time for the creation of a Palestinian state," and that the U.S. sees this "as essential for the future, not just of Palestinians and Israelis but also for the Middle East and indeed to American interests."

Rice is attempting to bridge wide divisions that have emerged over drafting a joint declaration ahead of November's conference in Annapolis, Md. The Palestinians want a fairly specific framework agreement addressing the so-called "core" issues of the Israeli-Palestinian conflict: the borders of a future Palestinian state, the status of Jerusalem and the fate of Palestinian refugees. Palestinian leaders fear that a lack of substance will be exploited by the Hamas militants who seized violent control of the Gaza Strip four months ago and refuse to recognize Israel's right to exist.

Olmert, on the other hand, is pushing for a vague statement that will leave the big questions open. Aides say he has no interest in having Abbas go home empty-handed, but at the same time fears conceding too much too soon could drown the whole process in domestic opposition.

Olmert's problems are worsened by multiple investigations of alleged corruption _ the latest announced on Sunday to probe allegations he did political favors for friends while serving as trade minister.

The Palestinians want the joint declaration to set a timetable for creating a Palestinian state. The Israelis want no deadline _ a position supported by the U.S.

It's far from clear whether a peace deal could be forged with Hamas ruling Gaza and Abbas' forces in control of only the West Bank. But moderates on both sides have been through enough negotiations to know what a peace deal would look like, including land swaps and a delicate power-sharing arrangement for Jerusalem.

What they don't know is how the rest of the Arab world will react _ particularly Saudi Arabia, whose wealth and political clout could do much to buttress a peace deal, especially if it chooses to attend the Annapolis summit.

Jerusalem -- The war in Lebanon has badly bruised the Israeli government and boosted Hezbollah's standing in the Arab world.

Israel says it has made some gains: the Lebanese army, backed by international troops, is to take control of south Lebanon.

But as the guns fall silent, an ominous question lingers over the Jewish state: Is another war with Hezbollah or even its sponsor Iran just around the corner?

A cease-fire that took effect Monday seeks to end the 34-day conflict in which the mightiest army in the Middle East was fought to a virtual draw by a small band of Shiite guerrillas.

Developments on the ground will determine the war's ultimate winners and losers - whether Hezbollah will be pushed back from Israel's border and eventually disarmed, whether Israel will be able to prevent Iran and Syria from funneling weapons to Lebanese guerrillas, whether Islamic radicals everywhere will be propped up by Hezbollah's successes.

For now, neither side can truly declare victory. Hezbollah's ability to withstand more than a month of Israel's punishing assaults while firing an uninterrupted stream of more than 4,000 rockets has given its fighters heroic status on Arab and Muslim streets.

"The biggest thing here is that Hezbollah and their small force has been able to restore the dignity of the Arabs. That is the bottom line," said Timur Goksel, an American University of Beirut professor who spent more than two decades as a senior U.N. adviser in south Lebanon.

But having joined the Lebanese government, the guerrillas are likely to pay a steep political price for provoking Israel's wrath. On July 12, they captured two Israeli soldiers and killed three others in a daring cross-border raid, sparking a war that killed more than 790 Lebanese and left much of that country in shambles.

And even if Israel achieves its goal of pushing Hezbollah away from its border, it, too, has suffered great losses, with 155 dead and hundreds of thousands of people forced to flee their homes or seek refuge in bomb shelters.

Israel failed to achieve its original goal of destroying Hezbollah or the group's fearsome array of Iranian- and Syrian-provided rockets.

Israeli critics are warning that Israel's deterrence may have suffered a life-threatening blow, giving archenemy Iran an opening to pursue its stated goal of destroying Israel.

"A couple thousand Iranian-backed Hezbollah fighters kept Israel at bay for over a month," said Chuck Freilich, Israel's former deputy National Security Adviser who is now a senior fellow at the Kennedy School of Government. "This now shows that irregular forces with Iranian support can be effective against a large and sophisticated conventional army."

If Israel can't deal effectively with Hezbollah now, some Israelis ask, what's going to happen down the road when Iran sends even more lethal weapons? For many, the future looks scary.

Hezbollah's rocket barrage, threatening the entire northern third of Israel, shattered taboos and seemed to signal that the Jewish state's survival is no longer a given.

In a speech Monday evening, Israeli Prime Minister Ehud Olmert said the cease-fire deal had eliminated Hezbollah's "state within a state" in Lebanon, and restored the Lebanese government's sovereignty in the south.

That's no small achievement for Israel, which has been trying in vain for six years - ever since it withdrew from south Lebanon following an 18-year occupation - to get Lebanon to implement a U.N. resolution calling for the central government to take control of the whole country.

During his speech, however, Olmert acknowledged "deficiencies" in the way the war was conducted, and promised to "do better" in the next war. His government is coming under intense criticism for failing to break Hezbollah or secure the release of the two kidnapped soldiers, and for holding off on a massive land invasion that many Israelis believed was necessary to win the war.

That invasion finally came last weekend in the war's 11th hour, when the U.N. Security Council was about to approve a cease-fire deal.

In the two days between the council's vote and the start of the cease-fire on Monday, 31 Israeli soldiers, including the son of famed Israeli novelist David Grossman, were killed in Lebanon. The last-minute push failed to achieve its goal of securing the territory up to the Litani River, about 18 miles north of the Israeli border.

Officials said the push was necessary to place troops in a better position in case the cease-fire collapsed. But Aluf Benn, political correspondent for the Haaretz newspaper, said the government was trying "to correct some of the bad impression" it made from previous military failures.

The war has called the survival of Olmert's government into question. And Israel's experience with unilateral withdrawals, from Lebanon in 2000 and from the Gaza Strip last year, has all but ended Olmert's plans to leave the West Bank as a way of securing a long-term Jewish majority for Israel.

Lebanon was Israel's second front in its battle against Islamic militants. The army has been pounding Gaza since June 25, when Hamas-linked militants seized an Israeli soldier in a separate cross-border raid.

For now, the main goal of Israel, Lebanon and the international community is to make the Lebanon cease-fire stick, a huge challenge because Hezbollah insists Israeli soldiers are legitimate targets until they leave, but Israel says it won't leave until the Lebanese army deploys.

Jerusalem - Gaza's transformation into a battlefield is a tale of lost opportunity and ill-fated visions.

The capture of a young Israeli soldier and Israel's tough response have threatened Israeli support for withdrawal from the West Bank, exposed rifts among the Islamic militants of Hamas and rendered the Palestinians' moderate president irrelevant.

Expectations that Palestinians would begin building their own state following Israel's historic withdrawal from the impoverished Gaza Strip last year have given way to despair and escalating bloodshed.

Israeli troops who had been clashing periodically with militants are back in Gaza fighting pitched battles with masked gunmen firing AK-47s and rocket-propelled grenades. Undersupplied Palestinian hospitals cancel non-emergency treatment to tend to the wounded. Families are fleeing their homes.

Israel blames what it calls the unfathomable decision by Gaza militants to continue firing rockets into Israel even after the Israeli pullout — rather than begin building their nation.

"You don't need to be our friends if you don't want to, but you have your opportunity. Be quiet, invest in your own, promote your own well being," said Brig. Gen. Ido Nehushtan, a member of the Israeli army's General Staff.

More and more Israelis see the aftermath of the Gaza withdrawal — the political rise of Hamas, the rocket attacks, a growing Syrian, Iranian and al-Qaida influence in Gaza — as proof that a similar withdrawal from the West Bank is not feasible.

Palestinian militants say Israel can't subjugate Gaza for four decades, withdraw and then expect everything to suddenly be normal. They say attacks on the Jewish state are justified because Israelis occupy the West Bank and still control Gaza's air, sea and borders.

Some Palestinians argue that Israel's decision to quit Gaza without negotiations undermined moderates and bolstered radicals.

"They made the peace camp in Palestine just irrelevant ... and they gave Hamas the opportunity to claim that the evacuation of Israelis from Gaza is an outcome of their resistance," said Ghassan Khatib, the Palestinians' former planning minister.

Palestinian President Mahmoud Abbas' failure stop militant attacks or win the release of 19-year-old Israeli Cpl. Gilad Shalit has underscored his growing marginalization and lack of power.

Hamas Prime Minister Ismail Haniyeh, considered a relative pragmatist, on Saturday called for a truce with Israel, but did not offer to release the Israeli soldier. Israel quickly rejected the proposal, saying it would not end its offensive unless he were freed.

Shalit was seized June 25 in a cross-border raid by Hamas-linked militants, who have demanded the release of some of the 9,000 Palestinian prisoners held by Israel.

That demand has widespread support among ordinary Palestinians, which cuts to the heart of the stalemate. Hamas could be finished politically if it gives up Shalit without a prisoner swap, and Israel fears that caving into militant demands would only encourage more attacks.

"We can't give in to such blackmail because if we do they'll kidnap soldiers and civilians again and again to use them again and again for negotiations," said Israeli Cabinet Minister Meir Sheetrit.

Yet Israel has sent mixed signals regarding a prisoner swap, with one senior minister hinting it might be possible.

But even if Israel agreed to a trade, disarray inside Hamas might preclude a deal. It is no longer the disciplined, monolithic movement it once was.

Senior Abbas aides say they believe Hamas' Syria-based political leader, Khaled Mashaal, approved the attack that grabbed Shalit without consulting the Hamas-led Palestinian government in Gaza, although Hamas spokesmen insist that isn't so.

The renewed battle has been a blow to Israeli Prime Minister Ehud Olmert's plan to withdraw from much of the West Bank and set formal borders, with or without an accord with the Palestinians, as Israel did in Gaza.

But Sheetrit said the lack of a Palestinian negotiating partner should preclude another pullback, popularly known as "disengagement."

"I don't think we should leave the West Bank. I'm against it. In my opinion there will be no more unilateral disengagements," he told The Associate Press.

Those words hold great irony because Sheetrit is a senior member of Olmert's 8-month-old Kadima Party, whose main reason for existence is to partition historic Palestine between Arab and Jew in order to ensure a long-term Jewish majority for Israel.

Still, a resolution of the Gaza crisis could rescue the concept of a West Bank withdrawal.

A largely overlooked but potentially significant development occurred in Gaza two days after Shalit's capture when negotiators from Hamas and Abbas' Fatah Party agreed on a joint platform that calls for the creation of Palestinian state alongside Israel.

Hamas has long refused to accept the legitimacy of the Jewish state, but the agreement was spurred by an increasingly bloody rivalry between Hamas and Fatah in Gaza that threatened to escalate into civil war.

And the current crisis has united Palestinians in a common rallying cry: No freedom for Shalit without a prisoner swap.

If the Shalit crisis is solved, either through a deal or military means, the recent moves toward Palestinian unity might bode well for a new approach on Israel that could end a crippling international aid boycott over Hamas' militancy and boost prospects for resumed peace talks.

Aluf Benn, the political correspondent for the Israeli newspaper Haaretz, said Israel doesn't need a friendly force on its border to leave the West Bank, only a coherent one that can maintain "some sort of security balance." Hamas hasn't fit that bill, he said.

"The prerequisite is not their stated positions or what they say about peace, but how they care for security," he said.