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.”

Peace talks with Israel are in deadlock and tear gas and rocks are flying at Jerusalem's holy sites, but for all the mounting frustration in the West Bank talk of a Third Intifada seems premature to most Palestinians.

A week after Israeli forces clashed with hundreds of Arabs who believed expansionist Jewish settlers were trying to enter the al-Aqsa mosque compound, there were scuffles again on Sunday and tension will remain high this week during holidays that draw Jewish worshippers to the Western Wall, close to the mosque.

After the violence the previous Sunday, Palestinian leaders accused Israel of trying to sink U.S. President Barack Obama's efforts to relaunch peace talks and compared it to a visit to the site in September 2000 by Israeli right-winger Ariel Sharon. That sparked what was dubbed the al-Aqsa Intifada, or uprising.

However, analysts and officials in the West Bank and East Jerusalem cited a number of factors likely to curb renewed violence in the near term, despite anger at new Israeli Prime Minister Benjamin Netanyahu, Sharon's right-wing successor, and with the Jewish settlers whose expansion drive he has defended.

"There is a state of disengagement between the people and its political leadership so people are not ready to sacrifice as they did before," said Zakaria al-Qaq of al-Quds University.

"At the same time there is a build-up of anger that is waiting for the spark. No one can predict when the spark will come. But it could take years yet."

Factors mentioned include disillusion that 4,000 Palestinians deaths in the years of uprising since 2000 have brought few benefits, while Israel has walled off the West Bank and closed the Israeli job market to Palestinians.

The schism that has seen Islamist Hamas seize the Gaza Strip and being suppressed in the West Bank by new, Western-trained security forces loyal to President Mahmoud Abbas is also likely to limit organised violence from the West Bank against Israel.

"CIVIL ACTION"

While Abbas has limited options in pressing Netanyahu for a peace deal, few see him turning to the kind of suicide bombings and other attacks seen under his late predecessor Yasser Arafat.

Spontaneous unrest among angry crowds may be more likely.

Mohammad Dahlan, a senior figure in the "young guard" of Abbas's Fatah party and a former security force commander, said he was wary that a new uprising would only harm Palestinians:

"If Netanyahu believes he wants to maintain the occupation as it is, to expand settlements and then expect peace from us, then this will not be acceptable," Dahlan told Reuters.

"We may resort to popular action or civil action. We have an open mind on all legitimate methods permitted by international law. But we won't push the Palestinian people into a disaster."

Political analyst George Giacaman of Birzeit University in the West Bank said: "If there is no meaningful political track on a specific timeline, a political vacuum will be created.

"This will be filled by resistance of some kind."

Israeli police hauled away youths, some only in their early teens, after stones and bottles flew in Jerusalem's Old City on Sunday. But the new generation, successors to the young men who spearheaded the rock-throwing of the First Intifada of the late 1980s and to the gunmen of nearly a decade ago, seems divided.

"Israel is fueling tensions that will explode later," said Raed Abed, a 17-year-old student in the southern West Bank city of Hebron. "No one can predict what will happen."

But his schoolmate Husam Sameh forecast no explosions for now: "Enough of fighting. We need to live in peace. We cannot fight Israel. We are so weak," he said.

"Still, the question is whether Israel is ready for peace."

Analyst Hani Masri said sporadic and largely spontaneous demonstrations that turn into clashes like those this past week in Jerusalem may become more common.

But he said: "The wariness among the people about popular resistance is greater than before, following the huge losses they suffered in the Second Intifada.

"Israel has used the Second Intifada as an excuse to build the wall and to avoid committing to signed agreements. Palestinians should not give them this excuse again."

Samir Awad, a political science professor at Birzeit University, said: "It would be a mistake to expect a popular wave of protest. I cannot see it happening.

"But if Israeli provocations in Jerusalem continue, we may expect clashes arising from religious and patriotic emotion."

Israel's delay in releasing frequencies for a second West Bank mobile phone network is holding up economic development, Middle East envoy Tony Blair said on Tuesday.

Blair said if Israel released frequencies for Wataniya Palestine mobile, it would create thousands of new jobs and hundreds of millions of dollars in investment.

"I hope that we can get this moved satisfactorily in the next few weeks," he told Reuters in an interview. "But again it has been very frustrating because we have an agreement, we secured the agreement. All we need is the frequency released."

Israeli Prime Minister Benjamin Netanyahu says he is committed to policies that will improve the Palestinian economy in the West Bank.

"The Israelis have now appointed Silvan Shalom the deputy prime minister, he will take personal charge of these projects ... because, you know, it's been slow," Blair said.

Wataniya Palestine signed a license agreement with the Palestinian Authority in 2007 after bidding 251 million Jordanian dinars ($354 million) to build and operate a new network competing with Palestine Telecommunications Co (PalTel).

But earlier this month, the company, owned by Kuwait's National Mobile Telecommunications Co (Wataniya), a unit of Qatar Telecommunications Co (Qtel), demanded its investment back unless the frequencies were opened.

The company has already installed equipment worth millions of dollars across the occupied West Bank and hired staff.

Blair said a second phone network "may seem a small thing in one sense but it's very important for Palestinian economy."

Israel controls West Bank airspace and telecommunications.

Following U.S. pressure on the right-leaning Netanyahu government, the premier on Sunday endorsed the establishment of a future Palestinian state, but with major conditions including restrictions on its sovereignty.

"We need to get the Israeli system moving, fast, get decisions taken because otherwise we wait for ages," Blair said.

The Wataniya project was set up to challenge the longstanding monopoly of the PalTel in the local market. Its collapse would undercut future investment, Palestinian and Western officials said.

"If we cannot get the proper frequency and it cannot go forward then we don't have proper competition on mobile telephony and we don't get the investment and jobs," Blair said.

The U.S. government and World Bank are also impatient to see the second network established, as part of efforts to boost support for Palestinian President Mahmoud Abbas and his Western-backed government in the Israeli-occupied West Bank.

Israel and the Palestinian government signed an agreement last year to release the frequencies. But Wataniya Palestine said it has yet to receive all of them, delaying the launch of commercial services in the West Bank.

Wataniya told Blair in a letter last month that Western-backed loans to build the network were in jeopardy because it lacked frequencies.

Western diplomats said the company's threat to pull out was a pressure tactic to spur Israel to release the frequencies.

Linoy, a five-year-old Israeli girl, happily nibbled some chocolate as she accompanied her parents on a shopping spree on a busy street with storefront signs written in Hebrew.

Nabi Elyas, a Palestinian village in the occupied West Bank catering to the Israeli consumer, has raised hopes on both sides of a divide that peaceful co-existence is possible.

Just a short drive from central Israel, the community of 1,500 residents is profiting from an influx of Jewish shoppers drawn by cheap prices and still kept out of the main Palestinian cities by Israeli security regulations.

“Here I even feel safer than I do shopping in Tel Aviv,” said Hanan Troitsa, Linoy’s father. “We come here two to three times a week,” added the girl’s mother.

Groceries, furniture and even dental treatment are on offer in Nabi Elyas, which is packed with cars from Israel, especially during weekends. It’s not a two-way street: villagers, like most other Palestinians, cannot get Israeli permits to visit Israel.

Security concerns during a Palestinian uprising that began in 2000 kept Israeli shoppers away for years and optimism about the chances for peace has long been in short supply.

But with attacks by fighters on Israelis now rare in the West Bank, consumers are venturing back to an area once known as a bargain-hunter’s paradise.

“This shows that we can live together. For those who do not believe it they should come here and see,” said Jalal Khleif, the mayor of Nabi Elyas.

David Dahan, from the Israeli town of Givat Shmuel near Tel Aviv, said Israeli and Palestinian leaders should follow the model of Nabi Elyas.

“We, the Palestinians and the Israelis can deal with each other in a friendly way. I personally have many friends here. If the politicians leave us alone we can run our affairs,” said the 70-year-old pensioner.

Although business may be booming in Nabi Elyas, a new right-leaning government in Israel espousing an “economic peace” rather than territorial compromise have raised Palestinian fears their dreams of a state could be shattered.

Israelis point to the Gaza Strip, controlled by Hamas Islamists, and what many see as a weak pro-Western Palestinian government in the West Bank, as barriers to a peace deal.

Slicing mutton for Israeli customers, Omar Ali, a butcher in the village, is counting at least a partial peace dividend. He said his sales triple during weekends and Jewish holidays.

“There is good income when they come here,” he said.

Israel freed nearly 200 Palestinian prisoners to a hero's welcome in the West Bank on Monday, seeking to bolster President Mahmoud Abbas as Secretary of State Condoleezza Rice began a new peace mission.

Making her seventh visit to Israel and the Palestinian territories this year in the long-shot U.S. effort to secure a peace agreement by December, Rice welcomed the release as "something that matters a lot to the Palestinians."

She said she still aimed for a peace deal before President George W. Bush leaves office in January but played down chances of any partial accord in time for the September U.N. General Assembly.

"It's extremely important just to keep making forward progress rather than trying prematurely to come to some set of conclusions," Rice told reporters as she flew to Tel Aviv.

"We continue to have the same goal which is to reach agreement by the end of the year," Rice said. She added later Washington was not pressuring the sides to "bridge the gaps," and acknowledged it would be hard to strike a deal this year.

Earlier, several thousand Palestinians, many of them waving flags of Abbas's Fatah faction, turned out at the Palestinian Authority compound in the West Bank city of Ramallah to welcome the 198 prisoners, including four women, released by Israel.

"There is no doubt that we seek peace and we are trying to seek our goals -- and there won't be peace without the release of all prisoners," Abbas said at the celebration.

Some 11,000 Palestinians are in Israeli prisons and securing their release is a highly emotive issue in Palestinian society, which regards them as symbols of resistance to occupation.

The longest-serving Palestinian prisoner in Israeli custody, Said al-Atabeh, 57, was among those freed. "This is a great joy for our mothers and our people but it remains a small step because we left behind us thousands of prisoners," Atabeh said.

Atabeh was arrested in 1977 and sentenced to life imprisonment after being convicted of involvement in bombings that killed an Israeli woman and wounded dozens of people.

"It's not easy to release prisoners, especially prisoners that were involved directly in terrorist acts against innocent civilians," said Mark Regev, a spokesman for Israeli Prime Minister Ehud Olmert.

BUILDING CONFIDENCE

About half of the prisoners on a release list published by Israel were to have completed their sentences next year, but 43 had at least five more years to serve. Offences listed next to prisoners' names ranged from stone-throwing to shooting attacks.

Regev said Israel was making a "confidence-building" gesture to Abbas that could boost Fatah after it lost control of the Gaza Strip to Hamas Islamists last year. The release, Regev said, could "serve to strengthen" the peace process.

Few analysts believe Rice, who on Tuesday will see Olmert in Jerusalem, Abbas in Ramallah and hold a three-way meeting with their chief peace negotiators, can secure a major breakthrough.

Progress towards a peace deal has been hampered by violence, Israeli settlement expansion and political uncertainty in Israel stemming from a corruption scandal involving Olmert.

In remarks on Friday, Israel's chief negotiator, Foreign Minister Tzipi Livni, cautioned against any outside pressure to paper over differences or try to achieve a deal that would fall short of the "comprehensive agreement that we want to reach."

Livni is seen as the frontrunner in a Kadima party race to replace Olmert, undermined by the corruption scandal. He has said he would resign after his successor is chosen.

Olmert could stay on for months as caretaker prime minister until a new government is formed, although many doubt that as a lame duck leader he would be able to put a peace deal in motion.

Speaking after Rice met separately with Livni and Ahmed Qurie, the chief Palestinian negotiator, a U.S. official said the Bush administration would work methodically toward a peace deal rather than making a dramatic, last-minute push.

"We would not want to do that at the expense of losing the progress that is being made," the official, who asked not to be named, told reporters.