International Court of Justice held 3 days of hearings 23-25 February on Israeli security fence. Israel claimed Court has no jurisdiction in matter, sent no representatives to hearings, which saw presentations from several parties opposed to barrier. U.S. and EU said Court not appropriate forum for resolving dispute. Day before hearings began, suicide bomber killed 8 others on bus in Jerusalem. On 29 February Israel’s High Court ordered work on barrier delayed 1 week while Palestinian complaints considered. Israeli raid into Gaza 11 February left 14 dead, and 28 February missile strike in Gaza City killed 3 militants and young boy. Ariel Sharon held meetings with U.S. envoys to discuss his plan for unilateral withdrawal from most of Gaza Strip. U.S. said to be supportive. Sharon to present plan to President Bush in Washington in late March.

Investigation of Israeli PM Ariel Sharon on bribery and corruption charges could result in indictment in coming weeks; if indicted, PM may be forced to resign. Sharon repeated his plan to unilaterally disengage from parts of West Bank and Gaza if no progress made toward peace in coming months. Palestinian PM Ahmed Qurei called for international pressure on Israel to halt construction of controversial security fence; said Sharon plan to withdraw behind fence would destroy chances of 2-state solution. 100,000 Israelis, including many settlers, demonstrated against Sharon in Tel Aviv 11 January, protesting plan to dismantle some settlements as part of withdrawal. Prisoner exchange between Israel and Hezbollah completed 29 January (see Lebanon section below). Violence continued: suicide bus bombing in Jerusalem left 10 dead 29 January; 8 Palestinans killed in Israeli raid in Gaza 28 January; female Hamas suicide bomber killed 4 Israelis in Gaza 14 January.

Israeli PM Ariel Sharon said in major speech that country will sever links with Palestinians if no progress made toward peace in coming months, suggesting political shift. Bush Administration responded with warning against taking unilateral steps which harm Roadmap. Palestinian leaders failed to agree to full ceasefire with Israel in Cairo talks; failure seen as setback for Palestinian PM Ahmed Qurei. UN General Assembly asked International Court of Justice in The Hague for opinion on controversial security fence through West Bank; Court to hold hearings in February. “Geneva Initiative”, offering full blueprint for peace settlement, launched 1 December with widespread support from world leaders. Suicide bombing in Tel Aviv 25 December first in over 2 months; attack killed 4, shortly after Israeli helicopter strike in Gaza killed 6, including militant leader.

Diplomatic activity behind scenes as pressure mounts for both sides to make concessions. Growing sense that time running out on Quartet-backed Roadmap. UN Security Council unanimously passed resolution 19 November endorsing Roadmap, but other initiatives, including “Geneva Initiative”, gaining momentum. Launched 1 December by group of Israelis and Palestinians led by Yossi Beilin and Yasser Abbed Rabbo, Initiative offers full blueprint for settlement following on from Camp David and Tabah negotiations discontinued in January 2001. Four former heads of Israeli Shin Bet security service warned Sharon’s policies risk “near- catastrophe”, echoing October comments by army chief. New government of Palestinian PM Ahmed Qurei approved; Arafat retained control of security services. Islamic Jihad and Hamas said to be considering truce, but talks with Egyptian mediator at preliminary stage. Violence diminished in November, though sporadic attacks continued.

Major escalation in Arab-Israeli conflict as Israel retaliated for devastating Haifa suicide bombing with first military attack on Syria since 1973 war. Air strike on apparently abandoned training camp near Damascus, seen as message to Syria that its support for Palestinian militants will no longer be tolerated, raised fears of possible broadening of conflict. Israeli aircraft struck five times in Gaza 20 October, killing 11 and injuring over 100, resulting in criticism – some internal – that attacks were disproportionate. Israeli army chief Lt-Gen Moshe Yaalon said government hardline policies damaging country’s interests. Palestinian PM Ahmed Qurei will stay on to form new government after one- month term of emergency cabinet expires at beginning of November. Three Americans killed in Gaza 15 October when bomb exploded on road as U.S. diplomatic convoy drove past. In New York, U.S. vetoed UN Security Council resolution urging Israel to halt construction of security fence in West Bank.

Power struggle between Arafat and PM Abbas ended with Abbas’s resignation; Ahmed Qureia, speaker of Palestinian parliament, appointed new PM. Three-year anniversary of intifada passed on 28 September with no peace in sight. Israeli attacks on Hamas leaders continued; Sheikh Ahmed Yassin, spiritual leader of Hamas, among targets. Suicide bombings also continued: attacks on Israeli café and bus stop on 9 September killed 15. Israel threatened to expel – and possibly kill – Arafat, drawing international condemnation. U.S. vetoed UN Security Council resolution urging Israel to cease threats against Palestinian leader. Meanwhile, U.S. and Israeli officials held talks in Washington aimed at reaching agreement on route of controversial security fence in West Bank.

Ceasefire called off by Hamas and Islamic Jihad after Israel killed senior Hamas leader in retaliation for suicide bombing in Jerusalem that killed 20 and injured 100. Israel has killed 10 Hamas members since bombing, and has vowed to continue targeting group’s leaders. Arafat appointed new national security adviser in apparent bid to reassert control over Palestinian security forces and undermine Prime Minister Mahmoud Abbas and his security chief Mohammed Dahlan. U.S. announced freeze on assets of 6 Hamas leaders as well as several charities alleged to have supported Hamas.