DIVIDING JERUSALEM: Sunday's Israeli cabinet meeting revealed an apparent broad majority for handing over neighborhoods in East Jerusalem to Palestinian rule. Some of the ministers have already declared their readiness to support a withdrawal from certain neighborhoods, while other ministers said that they support the idea in principle, but not in the context of current negotiations.

Speaking of the negotiations now being held in preparation for the Mideast peace meeting in Annapolis scheduled for next month, Foreign Minister Tzipi Livni (Kadima) expressed reservations over Israel conceding too much in advance. Israel should not be "dragged into making strategic concessions to the PA just for the sake of arriving at the summit with a piece of paper," she said.

Deputy Prime Minister Haim Ramon (Kadima) took issue with Livni's caution. He noted sarcastically that "whoever thinks that the structure of the Palestinian National Insurance will be discussed during the summit is deluding themselves." Mentioning that the fate of Palestinian refugees should be discussed, Ramon also pointed out that "there is an Israeli interest in Jerusalem's Jewish neighborhoods being recognized by the Arab [states] and the international community - as there is also an Israeli interest in [the Arab neighborhood] of Shuafat not remaining under our control." Ramon added: "This is what is meant by 'diplomatic horizon.' There is no chance that only bureaucratic issues will be discussed at the summit, and when the Palestinians ask what is the diplomatic horizon, we will tell them that we won't say."

Ramon's comments were reportedly supported by Environment Minister Gidon Ezra (Kadima), as well as by Strategic Affairs Minister Avigdor Lieberman (Yisrael Beitanu), who is considered to be the most right-wing member of the cabinet. Lieberman said that Israel "must make concessions on the Jerusalem issue, or transfer to Palestinian control some of the neighborhoods and refugee camps." He added his view that "the Old City and Mt. Scopus are an inseparable part of Jerusalem and so they will remain." At the same time, Lieberman suggested that Israeli commitments should not be proposed until the Palestinians are capable to make concessions to Israel.

Following these developments, Ma'ariv reports that "top Labor Party officials said that if Kadima and Yisrael Beiteinu declare Israeli readiness in principle to historically separate from certain neighborhoods in East Jerusalem, the Labor Party would join the move." However, Shas, the other large coalition partner, announced that it would oppose these moves.

In another sign of the potential for an agreement on Jerusalem, the Palestinian newspaper Al-Quds Al-Arabi reported this morning that Palestinian President Mahmoud Abbas and Prime Minister Ehud Olmert agreed between them on Jordanian control over the Muslim holy sites in Jerusalem. According to the report, the Jordanian royal house will administer the holy sites in Jerusalem just as the Saudi royal house administers the Muslim holy sites in Mecca and Medina. A committee for the supervision of Jerusalem will reportedly be established and will include representatives of the Palestinians, Jordan, Egypt, Israel and the UN.

Meanwhile, one Kadima leader - Internal Security Minister Avi Dichter - is pushing forward plans that would complicate the possibility of a meaningful compromise on Jerusalem. Dichter told Ha'aretz last week that a large new police complex will be opened by the end of the year in an area termed E-1, which lies in the desert east of Jerusalem and west of the settlement of Ma'ale Adumim. Ha'aretz reports that international leaders had criticized Israeli construction at the site as it "would cut off Palestinian territorial contiguity and surround East Jerusalem with Israel neighborhoods, a matter that would prevent its development as the capital of the future Palestinian state." Construction of 3500 residences at the site had been frozen under pressure from the Bush Administration, which demanded that the future of this territory be determined in negotiations. (Ma'ariv, 10/8/07; Ha'aretz, 10/1 & 10/7/07; Israel Army Radio, 10/8/07)

PEACE NOW VS. HEBRON SQUATTERS: Israel's State Attorney's Office told the High Court of Justice last week that it supports the eviction of settlers who are squatting in Palestinian-owned stores in a Hebron market. The request was made in an appeal filed by Peace Now seeking to overturn a decision by a Military Appeals Committee to delay the eviction. The State Attorney's Office told the court that the Military Appeals Committee's was "extremely unreasonable and constitutes a serious attack on the rule of law."

In recent years, two settler families had broken into and started living in four shops in Hebron's downtown market, which has been closed by the Israeli military for years. Following complaints to the police and the Civil Administration, Israeli authorities issued eviction orders in June. One month later, a settler group appealed the eviction orders before the Military Appeals Committee, which decided to allow the settlers to continue residing in the shops until the conclusion of legal proceedings, even though the settlers failed to present any legal claim to the land. The settlers' sole argument was that they should be allowed to live in the shops because the shops were owned by Jews prior to 1948.

The Military Appeals Committee issued its ruling despite the disapproval of the State Attorney's Office, which stated that "the activity in question is illegal, deliberate and premeditated, and violates the rule of law in Hebron." Peace Now's appeal points out that "the meaning of the [appeals committee] decision is that Jewish squatters can use any outrageous argument, in the name of the people and the nation, and succeed even if there is no valid legal basis."

State Attorney Gilad Sherman made Israel's position clear. He said that the settler group, known as the Hebron Old City Rehabilitation Committee, "initiated the Jewish families' invasion of the stores, and this without any legal right. This committee's goal, it would seem, was to force the local authorities and the state to deliver the stores and other property in Hebron into their hands and to create facts on the ground." (Ha'aretz, 10/1/07; Peace Now, 10/7/07)

TALKING WITH HAMAS: The London-based Arabic-language newspaper al-Sharq al-Awsat reported Wednesday that Fatah and Hamas have agreed in principle to launch a secret dialogue in Cairo, mediated by Egyptian Intelligence chief Omar Suleiman. Suleiman, who has had ongoing contacts with leaders in both movements, is said to have asked each faction to provide him with their "vision" for a solution to the crisis before a date to start the talks is set. Azzam al-Ahmad, head of the Fatah faction in the Palestinian parliament, has reportedly been tapped to lead his movement's delegation to the talks. High-ranking officials from Saudi Arabia, Sudan, and Yemen are also said to have played mediating roles, while Ahmed Yousef, an adviser to the Hamas prime minister, told Yedioth Ahronoth that European leaders as well are involved in the mediation.

Fatah strongman Jibril Rajoub, who has served as national security advisor to Palestinian President Mahmoud Abbas, also reportedly spoke with a number of Hamas leaders overseas, including the Hamas representative in Lebanon, Osama Hamdan, and Muhammad Nazzal, a member of Hamas' political bureau.

Hamas is reportedly eager to renew dialogue in the hope that this will lead to a lifting of the economic siege on Gaza. Fatah also wants dialogue; its leaders know that without some level of buy-in from Hamas, it will be impossible to reach any diplomatic agreement with Israel.

The stakes are high. On the one hand, Israeli leaders continue to hint that a large-scale military operation in Gaza may be on the horizon. On the other hand, Hamas Prime Minister Ismail Haniya has been calling on Arab leaders to boycott the conference. Israeli security officials told Yedioth Ahronoth that they fear that Hamas will not stop at rhetoric: "Rather, they believe that Hamas is likely to step up its efforts to perpetrate bombing attacks inside Israel by means of its activists in the West Bank. If they fail to set a large-scale terror attack in motion then they are expected by Israeli security officials to step up the volume of rocket fire on the communities of the western Negev."

Writing in the Guardian, former Israeli negotiator Daniel Levy observes that "further deterioration in Gaza could wreck the November process. Israeli political support for a peace effort could probably not survive a particularly bloody Qassam rocket hit. Likewise, Palestinian Authority president Mahmoud Abbas's position makes peace summitry and a Gaza invasion, with the attendant civilian death toll, an almost impossible combination to pull off. Ongoing Israeli-Hamas clashes also provide a useful additional excuse for IDF refusal to ease closures and remove checkpoints in the West Bank. Heightened security may protect the November effort against Hamas terror. However, the iron fist in Gaza has every prospect of over-shadowing the outstretched hand in Annapolis. So, a serious November effort actually requires promoting, not opposing, a ceasefire between Gaza and Israel."

Levy adds that following the deterioration on living conditions in Gaza, "key Hamas figures have actually proposed a ceasefire or hudna. If this is the result of Israeli pressure, then now would be a good time to take yes for an answer. There is no military solution."(Yedioth Ahronoth, 10/5 & 10/7/07; Ynet, 10/3/07; Guardian, 10/2/07)

BLACKWATER MEETS CHECKPOINTS? The Israeli military has turned over operation of at least 5 northern West Bank checkpoints to private security firms in recent months. The privatization of other checkpoints is expected soon. Eliezer Rosenbaum, deputy director general of the Public Security Ministry, told Ha'aretz that the privatization of Jerusalem-area checkpoints should begin by mid-2008. The new system is reportedly intended to save money, make security checks more efficient, and improve "the level of service" to Palestinians.

From the vantage point of Ha'aretz's Meron Rapoport, who visited one of the newly privatized checkpoints near Jenin, the Palestinians view this as a change for the worse: "Without exception, men and women, young and old, miss the soldiers. They say it quickly before entering the checkpoint, and explain why at greater length when they emerge, exhausted, after a wait ranging from 45 minutes to an hour and a half. 'May God remove whoever brought them here,' somebody says, summing up the widespread feeling toward the civilians who have replaced the soldiers."

"When the civilian company came, the prevailing assumption was that they would be better than the army," Bassam Yehiye from the village of al-Araqa told Rapoport. "But in fact they are worse, and the situation deteriorates with each passing day."

In June, Haggai Alon, a former adviser to the defense minister, raised a number of tough questions regarding the authority of private security companies vis-à-vis that of the army and the police. For instance, Alon warns of the "real danger that private companies will operate under instructions for opening fire without supervision or authority." He adds that under the potentially "positive move of civilianizing the checkpoints lies a dangerous process of putting [national] security in private hands." Indeed Rosenbaum admits that it is not yet clear if the contractors are under the authority of the Defense Ministry or Public Security Ministry.

A Ha'aretz editorial on Wednesday notes that the new upgrades of West Bank checkpoints are part of a dynamic in which the "occupied territories and the Palestinians living there are slowly becoming virtual realities, distant from the eye and the heart. Palestinian workers have disappeared from our streets. Israelis no longer enter Palestinian towns for shopping. There is a new generation on each side that does not know the other. Even the settlers no longer meet Palestinians because of the different road systems that distinguish between the two populations; one is free and mobile, the other stuck at the roadblocks."

The privatization of checkpoints, observes the editorial, appears to be "an act of normalization, similar to the situation at international border crossings. But in this case a country exists only on one side. In the absence of an agreed border, there is only a security border that Israel has unilaterally established. The frustrated and frightened soldiers checking every Palestinian have now been replaced by contractors hired by the Defense Ministry. The checks are being carried out by sophisticated means, almost without human contact, in reinforced, blast-proof structures. The new method has removed a burden from IDF soldiers but has created a distancing. The contact between the soldiers and the Palestinians at the crossings, precisely because it is so traumatic, has driven the Israelis and Palestinians to seek a political solution. The stories the soldiers brought home fueled public debate."

"Can this situation continue indefinitely?" asks the editorial. "The more Israelis see less of the occupation, the easier it becomes to ignore. In September, 33 Palestinians and one soldier were killed in operations against terror and Qassam rockets. Only in the next intifada, or after missiles are fired at Israel from the West Bank, will we once again be reminded of the occupation." (Ha'aretz, 10/2 & 10/3/07)