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.”

TEL AVIV, Jan. 13 -- Israeli military officials said Tuesday that their 18-day offensive in the Gaza Strip had weakened Hamas but that a knockout blow was unlikely. The conflict showed no signs of ending as diplomats reported little progress in negotiating a cease-fire.

The Israeli officials said their strategy was to squeeze Hamas militarily as they try to pressure the Islamist movement into a truce that would include a long-term commitment to stop firing rockets into southern Israel. Some Hamas leaders have said they are willing to cut a deal, but others have pledged to continue fighting.

Despite public vows by Israeli politicians to destroy Hamas's military capability, Israeli officials said Tuesday that the movement had lost only a fraction of its fighters and retained a large stockpile of rockets and other armaments. A "few hundred" Hamas fighters have been killed, out of a total force of 15,000, according to a senior Israeli military official.

In a briefing for foreign journalists, the senior official said Hamas still has hundreds of rockets and other missiles. "We do not see where they have a shortage of personnel to fight," the official said, speaking on the condition of anonymity because he was discussing intelligence matters.

Lt. Gen. Gabi Ashkenazi, the Israeli military chief of staff, said Gaza had been pummeled by more than 2,300 airstrikes since the war began Dec. 27. "We have achieved a lot in hitting Hamas and its infrastructure, its rule and its armed wing, but there is still work ahead," he told the Israeli parliament Tuesday.

For the past several days, Israeli forces have edged closer to Gaza City and other urban centers where Hamas is strongest, but they have held back from an all-out confrontation. Military officials said the goal was to force Hamas into a diplomatic settlement by gradually increasing pressure on the battlefield.

"The issue is, will Hamas agree to stop the firing of rockets into Israel, something they've been doing for eight years?" the senior official said. "This is what we are going after."

Hamas leaders, however, have been split on how to respond. Officials from Gaza have said they are willing to negotiate as long as Israel agrees to withdraw its forces and re-open border crossings that Israel and Egypt closed after Hamas seized exclusive control of the territory in June 2007.

"It is our duty to end the suffering of the Palestinian people," Ghazi Hamid, a Hamas spokesman, told al-Jazeera television Tuesday. "We need to be sure that Israel will respect the cease-fire and not target Gaza again."

But Hamas leaders in exile in Syria have taken a harder line, and it is unclear who is calling the shots.

On Tuesday, Hamas emissaries met in Cairo with Omar Suleiman, Egypt's intelligence chief, who has brokered the negotiations. No breakthroughs were reported. Suleiman later accompanied Egyptian President Hosni Mubarak to Riyadh, Saudi Arabia, to meet with Saudi King Abdullah as Arab leaders tried to coordinate a regional strategy for ending the conflict.

Israel announced that it would send an emissary, Defense Ministry official Amos Gilad, to Cairo on Thursday. Egypt is overseeing the talks in part because Israel refuses to speak directly with Hamas, which it considers a terrorist organization. Israel is also trying to persuade Egypt to accept an international force to help patrol its side of the Gazan border, something officials in Cairo have been reluctant to do.

Israel and Hamas have both rejected a U.N. Security Council resolution calling for an immediate and "durable" cease-fire. On Tuesday, U.N. General Secretary Ban Ki-moon left New York for the Middle East. He is scheduled to visit Egypt, Syria and Jordan in a bid to end the diplomatic impasse.

In Washington, the State Department used unusually strong language Tuesday to deny a claim by Israeli Prime Minister Ehud Olmert that he personally persuaded President Bush to order that Secretary of State Condoleezza Rice abstain on the resolution, which she had negotiated.

Olmert's claim is "wholly inaccurate as to describing the situation, just 100 percent, totally, completely not true," spokesman Sean McCormack said. He said Rice had recommended that the United States abstain.

Israeli military officials said they have focused their combat operations in recent days on the northern part of the Gaza Strip, especially in the suburbs around Gaza City.

Health officials in Gaza said about 960 Palestinians have been killed since the war began, more than half of them civilians. Thirteen Israelis have died, including 10 soldiers. The three others were civilians struck by Hamas rockets.

Israeli military officials said Tuesday that the war has weakened popular support for Hamas in Gaza, which prompted the movement's officials there to send delegates to Cairo for the cease-fire talks. "Their leadership in the Gaza Strip feels the pressure and feels a need to stop the fighting," the senior military official said.

But many Gaza residents interviewed Tuesday predicted that Hamas would bolster its appeal in the long term by standing up to the Israelis. "This crisis was created by Israel and it will create more hatred toward Israel," said Mohamed Ali, 39, a resident of Gaza City. "Who has killed all of our people? Not Hamas. Israel."

While some people expressed anger at Hamas for engaging Israeli soldiers in residential areas, others said the guerrillas had no choice.

"They were born among the people and came from the people," said Tamir Mansour, 35, a clerk at a Gaza City medical clinic. "Gaza is a very narrow, very congested place. We don't have separate camps for the fighters and separate camps for civilians."

Staff writer Glenn Kessler in Washington and special correspondent Reyham Abdel Kareem in Gaza City contributed to this report.

The biggest hurdle to winning a cease-fire in the Gaza Strip, according to diplomats and Israeli military officials, is a problem that has bedeviled Israel for years: how to stop Hamas from digging tunnels into Egypt in order to bring tons of rockets and other weaponry into Gaza.

Mediators are trying to come up with an anti-tunnel plan to satisfy Israel, which has said it won't agree to a truce unless it includes concrete measures to prevent Hamas from rearming. Some of the ideas under consideration include construction of a giant underground barrier along the nine-mile border between southern Gaza and Egypt, as well as international military patrols with the authority to search for and destroy any freshly built tunnels, Israeli officials said.

Former British prime minister Tony Blair, who along with several other European leaders has been trying to broker a deal, said Tuesday in Jerusalem that an "immediate cease-fire" was within reach if a solution to the tunnel problem could be found.

"These circumstances focus very much around clear action to cut off the supply of arms and money through the tunnels that go from Egypt into Gaza," Blair told BBC radio. "I think that is the one basis on which we could bring a quick halt to" the fighting, he added. "Otherwise, I think we are in for a protracted campaign."

Israeli military officials estimated that they had blown up about half of the estimated 300 smugglers' tunnels along the Gaza-Egyptian border since Israel began airstrikes Dec. 27.

Maj. Avital Leibovich, an Israeli military spokeswoman, said that Hamas had used the tunnels to acquire 100 tons of explosives in the past year, among other supplies. "They basically smuggle everything from people to rockets," she said. Israel has imposed an economic blockade on Gaza since Hamas took exclusive control of the territory in June 2007, and Gazans have used the tunnels as their only means of trade with the outside world.

Israeli leaders acknowledged that the Gaza military campaign would serve only as a short-term fix and that Hamas would probably dig a new network of tunnels as soon as the Israeli military withdraws. As a result, they said, any cease-fire deal would need to include a provision for blockading the Egyptian-Gaza border, above and below ground.

"The result must mean an effective blockading of the Philadelphia route, with supervision and follow-ups," Israeli Prime Minister Ehud Olmert said in an interview with the newspaper Haaretz, referring to the corridor that separates southern Gaza from Egypt.

Israel has effectively sealed off Gaza's eastern and northern borders and closely patrols Gaza's western side along the Mediterranean Sea. But it has accused Egypt of turning a blind eye to the tunnels in the south, even though the 1978 peace accord between Israel and Egypt limits the security forces that each country can deploy along their shared border.

Israel's military had warned that smuggling would become a problem before it withdrew its soldiers and settlers from Gaza in 2005 and considered a variety of schemes to thwart potential tunnel diggers. The most audacious idea: an 80-foot-deep moat filled with seawater, with an estimated price tag of $250 million.

But the military nixed the moat proposal after Israel's attorney general said he would oppose it because of fears it would contaminate Gaza's scarce underground water supplies. A plan to dig a giant dry trench was also shelved because it would have required the destruction of hundreds of Palestinian homes along the border corridor.

Those and other plans to construct a subterranean barrier have been getting another look since Israel began its offensive in Gaza last month, officials said.

Roni Bart, a retired Israeli army colonel and a research associate at the Institute for National Security Studies at Tel Aviv University, said a Gaza barrier would cost far less and probably generate much less political controversy than the 456-mile-long security barrier -- which includes fences, roads and walls -- that Israel is building around much of the West Bank.

"It's nothing compared to that," he said. "Anything you can do to stop smuggling, by definition, weakens Hamas."

A senior Israeli official who briefed reporters on the military campaign did not rule out the possibility that Israel would attempt to construct an underground physical barrier along the Gaza-Egypt border.

"I cannot tell you the technical solutions" we are considering, the official said. "But this has to be taken care of and we have a better chance to do it now."

Mark Regev, a spokesman for Olmert, said Israel was open to any plans that would block Hamas from digging more tunnels.

"There are different ideas out there and the Israeli government is willing to hear the input of the international community," he said. "This is a crucial issue for Israel. Without some sort of effective mechanism to stop the flow of armaments, there can be no sustainable calm in the south."

Israeli officials and analysts said any cease-fire deal would hinge on cooperation from Egypt, as would construction of an underground barrier.

Israeli leaders have rejected cease-fire proposals that would involve sending international observers to Gaza, saying that such teams would be ineffective unless they had the authority to destroy tunnels or engage Hamas fighters.

"It's clear that we don't need monitors to tell us that 'today, 10 tons of armaments passed through the tunnels,' " Regev said. "We need a mechanism that will work, but what form that might take is fluid."

Egyptian officials haven't said whether they would allow foreign troops or monitors on their side of the border. But they have held talks in recent days with European diplomats and Hamas delegates.

Hamas has said that it will agree to a cease-fire only if Israel agrees to reopen border crossings from Gaza and end the blockade.

Officials with the Palestinian Authority, which holds power in the West Bank and is led by political rivals of Hamas, said they favor allowing international observers into Gaza as part of a truce. But they have been reluctant to endorse a plan that would give outsiders police powers and the authority to destroy tunnels.

"If you are talking about observers that will go and shut down tunnels, they are not really observers," Riad Malki, the Palestinian Authority foreign minister, told reporters Monday at the United Nations in New York.

Efraim Inbar, director of the Begin-Sadat Center for Strategic Studies at Bar-Ilan University, predicted that a solution would be elusive. He said few countries would be willing to send armed forces to Gaza. He also derided the idea of building a trench or underground wall, saying that smugglers would inevitably find a way around.

"It's just not practical," he said. "It would cost a lot of money. Who's going to pay for it? America?"

He said the most effective course would be to pressure Egypt -- which sees Hamas, an Islamist movement, as a political threat to its secular government -- to take action on its own against smugglers. "That's the only practical way," he said. "All the rest is wishful thinking."