U.S. officials said the $10 million program announced Tuesday by Rice will be funded in part by the nearly $30 million that the United States requested back from the Palestinian Authority earlier this year.

In all, the U.S. has canceled or suspended $411 million in aid out of concern the money could help the new Hamas-led Palestinian government.

Israel will give the Palestinians until the end of the year to prove they are willing to negotiate a final peace deal, and will unilaterally set its final borders by 2008 if they don't, Israel's justice minister said Wednesday.

The statement by Justice Minister Haim Ramon, a close associate of Prime Minister Ehud Olmert's, was the first by an Israeli official to set a deadline for the Hamas-led Palestinian government to disarm and recognize the Jewish state.

The Palestinians' moderate president, Mahmoud Abbas, of the rival Fatah party, has tried to persuade Israel to bypass Hamas and resume peace talks with him, but Olmert has said he wouldn't negotiate with Abbas if Hamas didn't change its violent ways.

"Through the end of this year, 2006, there will be honest attempts to talk to the other side," Ramon told Israel's Army Radio.

"If it becomes clear by the end of the year that we really have no partner, and the international community is also convinced of this, then we will take our fate into our own hands and not leave our fate in the hands of our enemies," he added.

The Israelis have tired of the occupation game, waiting for the Palestinians to produce viable negotiators for peace. Hamas will only commit to a "long-term truce' if Israel returns to the borders that Arab nations found so attractive for attacks twice in twenty years. The Palestinians won't even negotiate for a formal end to hostilities or recognition of Israel. They want to keep their primary goal alive, which is the destruction of the "Zionist entity" and the acquisition of all the land to the Mediterranean.

The Israelis will not establish the long and nearly indefensible border positions that almost saw them pushed into the Mediterranean, nor should they. Israel occupies the West Bank because of the offensive war that Arab nations staged through that territory; they risked that territory and lost it. The Israelis have every right to reset its borders accordingly to ensure that they have a more defensible frontier, and if the Palestinians refuse to negotiate the terms, then Israel should set them, pull back behind them, and end the occupation and the debate.

THE United States, facing a possible humanitarian crisis, last night agreed with its Quartet partners to set up a “temporary international mechanism” to channel aid directly to the Palestinians, despite its boycott of Hamas.
In an agreed statement, the Quartet of the US, Russia, the EU and the UN said that the mechanism should begin operating “as soon as possible”, and ensure “direct delivery of any assistance to the Palestinian people”.

The statement was issued after Egypt, Jordan and Saudi Arabia predicted a civil war if the Hamas-led Palestinian Authority was left to collapse.

Diplomats said that it was not yet decided how many of the 160,000-plus Palestinian Authority employees, including 70,000 security personnel, would receive their salaries through the arrangement. The government salaries, which support about one third of Palestinian families, have not been paid for two months.

Shortly after the incident occurred, the army was leaning toward accepting the assumption that the disaster was caused by an errant Israeli artillery shell. While the IDF spokesman's initial announcement did not formally accept responsibility, it expressed deep regret for the deaths and announced an end to the artillery fire on Gaza until the incident had been investigated. The foreign media unequivocally blamed Israel for the deaths, and the Israel media (including Haaretz) tended to do the same.

An American expert working with Human Rights Watch, Marc Garlasco, is a former Pentagon official who did bomb damage assessment for the American military in Kosovo and worked for the Defense Intelligence Agency.

He said that he had visited the beach the day after the explosion, and that the crater size, the shrapnel and the location of injuries on the bodies all pointed to "a shell dropping from the sky, not explosives under the sand."

In an interview in Gaza, he said he had found shrapnel "consistent with a 155-mm. Israeli shell fired from a M109 howitzer," including one piece stamped "155mm."

"We checked each and every shell that was fired from the sea, the air and from the artillery on the land and we found out that we can track each and every one according to a timetable and according to the accuracy of where they hit the ground.

“It’s a black day for activists of human rights and people who believe in values of dignity,” Mr. Hussein said. “We believe this decision is a bad decision for all of us — civilians first of all, and peace activists.”

An Israeli judge ruled on Tuesday that the state bore no responsibility for the death of Rachel Corrie, the young American woman who was run over by a military bulldozer in 2003 as she protested the demolition of Palestinian homes in the Gaza Strip. The lengthy verdict in the civil case, read in part to a courtroom in Haifa packed with supporters of Ms. Corrie’s family, called the death a “regrettable accident” — a characterization that Ms. Corrie’s allies strongly disputed.

“She chose to put herself in danger,” said the judge, Oded Gershon. “She could have easily distanced herself from the danger like any reasonable person would.”

Since her death, Ms. Corrie has become an international symbol of the Palestinian resistance. A play based on her writings has been performed in 10 countries, and a ship in an attempted aid flotilla to Gaza bore her name. Books, documentaries and songs have recounted how Ms. Corrie, a 23-year-old student, dressed in an orange vest and wielding a bullhorn stood between a bulldozer and the home of a Palestinian family in March 2003 during the height of the second intifada, or uprising.

Hussein Abu Hussein, the lawyer who brought the wrongful-death suit on the Corrie family’s behalf, said he would appeal the ruling within 45 days to Israel’s Supreme Court. At a news conference after the verdict, he showed pictures of Ms. Corrie taken the day of her death, saying “anyone could have seen” her bright garb.