Prime Minister Benjamin Netanyahu has said that Israel wants to keep its troops on the eastern border of a future Palestinian state.

A second round of US-sponsored Israeli-Palestinian peace talks started yesterday in Egypt but yielded little progress on the issue of West Bank settlements that may derail the negotiations.

Mahmoud Abbas, the Palestinian President, yesterday opened the first face-to-face Middle East peace talks in two years by demanding an end to Jewish settlements in the West Bank. In response, Prime Minister Benjamin Netanyahu insisted that any agreement must assure Israel's security as a Jewish state.

The Israeli Prime Minister, Benjamin Netanyahu, is battling to control his coalition as he heads for a showdown with his hardline foreign minister, Avigdor Lieberman. Mr Lieberman, leader of the ultra-nationalist Yisrael Beiteinu Party, has complained bitterly that his party has been sidelined in decision-making and blocked over key legislation. He is now on a collision course with the Prime Minister over a Jewish conversion bill that Mr Netanyahu says could tear the Jewish people apart.

Israel has agreed "in principle" to taking a significant step towards relaxing a three-year blockade of Gaza that has crippled economic life and halted post-war reconstruction, the international Middle East envoy, Tony Blair, said yesterday. Mr Blair said after briefing European Union foreign ministers in Luxembourg on his negotiations with the Israeli Prime Minister, Benjamin Netanyahu, that he hoped the blockade would be eased within days.

Lord Trimble, the former leader of the Ulster Unionists, is to be a foreign observer on an official Israeli inquiry into the naval commando raid on a Gaza-bound Palestinian flotilla which cost nine Turkish lives a fortnight ago.

The Palestinians yesterday announced the official start of indirect peace talks with Israel after a 17-month breakdown, while Israel's leader urged a quick transition to face-to-face negotiations.

The more unwilling Binyamin Netanyahu is to take a historic leap, the more dangerous it’s going to get, says David Remnick, Editor, The New Yorker.

The brother-in-law of Benjamin Netanyahu, the Israeli Prime Minister, yesterday accused Barack Obama, the US President, of being "anti-Semitic".

As snubs go, this one takes some beating. Israel's announcement that it plans to build 1,600 new homes in East Jerusalem comes at the very moment that US Vice-President Joe Biden is on its soil, talking up prospects for peace.