There are also a lot of games being played in the background, with the western countries having spy rings inside Iran, and one of these spy rings detected the presence of another Iranian secret nuclear enrichment facility near the holy city of Qom. This detection forced the Iranians to announce the presence of this nuclear facility in a letter to the IAEA, and there are complex legalities about whether having a secret facility like this was proper or not (Iran claimed that it only had to announce once it reached a certain stage of activity). This announcement however raised more suspicions about the motives of the Iranians, and whether there were more such facilities that were hidden in the country. The Western countries are also racing against another unstated deadline, possible Israeli activity. Israel sees Iran as a deadly enemy, and may act militarily to destroy the Iranian facilities, something that would dramatically escalate tensions. Other powers in the area, such as Saudi Arabia would also be uncomfortable if Iran went ahead and built a bomb (link to article):

ElBaradei urged Iran to submit to more comprehensive inspections because its nuclear program is so advanced. “It would help the agency to have Iran subscribing again to our regulations that allow us to be informed of the construction of nuclear facilities as early as possible,” he said. He also pressed Iran to give the IAEA “the authority for more information, for access to more locations that would enable the agency to provide assurances not only about declared nuclear activity in Iran but also about possible undeclared activities.”
Iran’s top nuclear negotiator Saeed Jalili met with William J. Burns, the U.S. undersecretary of state for political affairs, a senior U.S. official and a diplomatic source confirmed to CNN. The men discussed Iran’s nuclear program, a sit-down described as the first face-to-face meeting between the U.S. and Iran over the program. International powers want inspectors to have free access to Iran’s new facility and have threatened more sanctions if the Islamic republic doesn’t change its ways.

This aerial and ground campaign by Israel has now laster for 18 days, during which Israel seems to have learned from its previous such conflicts. It has withstood pressure from all around to stop this campaign (and taken heart from the Bush administration’s unwillingness to criticize Israel for these actions), taking the campaign deep inside Gaza. There have been a huge number of civilian casualties in this campaign, but Israel is stone-walling all such pressures. Inside Israel, the realization that Hamas controls a territory from where it can keep on attacking Israel through rockets that are steadily increasing in range (and from where it can soon reach crucial parts of Israel) would be part of the calculations to try and stop Hamas. This is a risky effort, and will not win Israel too many friends (although if the campaign succeeds and Hamas is weakened, there will be a weakening of the push by Iran and Syria to take leadership of the anti-Israeli campaign; something that will make many of the Governments of many of the Islamic countries of the region happy).

Israel says it attacked more than 60 targets overnight in Gaza as its offensive against Hamas entered its 18th day. The air assault came as Israeli troops advanced in the southern and eastern suburbs of Gaza City. The Israeli military also announced another three-hour ceasefire, starting at 0900 local time (0700 GMT), to allow aid lorries into Gaza.
Meanwhile, reports suggest diplomatic efforts between Egypt and Hamas in Cairo are progressing. After meeting Egyptian President Hosni Mubarak, Middle East Quartet envoy Tony Blair said the elements were in place for a ceasefire agreement. “I am hopeful we can put an agreement together but it’s going to have to be worked on very hard and it’s got to be credible,” he told journalists. Israel hopes the scale of its operation will greatly reduce the number of missiles fired from Gaza into southern Israel, while eroding support for Hamas.

There are no easy solutions to the problem. The people of Gaza voted Hamas into a leading position, and pretty soon Hamas had evicted Fatah militarily from the strip of land, and taken command of the small strip of land abandoned by Israel in 2005. Hamas sees a long term aim as the eviction of Israel from the region, and does not recognize its right to exist. Israel is hoping that it will be able to destroy the top leadership of Hamas and scare it enough that Hamas will stop firing rockets into Israel, and one does not know whether that can ever be achieved.

Hezbollah handed the bodies of two Israeli soldiers to the Red Cross on Wednesday to be exchanged for Lebanese prisoners held by Israel in a deal viewed as a triumph by the Lebanese Shi’ite guerrilla group. Many Israelis see it as a painful necessity, two years after the soldiers’ capture sparked a 34-day war with Hezbollah that killed about 1,200 people in Lebanon and 159 Israelis.

The fathers of the two Israelis soldiers spoke of their pain at watching the television pictures of their sons’ coffins. “It is not easy to see this, although there was not much surprise to it. But … confronting this reality was difficult, yes,” Shlomo Goldwasser told Israel radio. Zvi Regev said on Army Radio: “It was very moving when we saw it. We couldn’t watch too long. It was a terrible thing to see, really terrible. I was always optimistic, and I hoped all the time that I would meet Eldad and hug him.” Hezbollah’s Safa said Israel had later handed over via the ICRC the bodies of eight Hezbollah fighters slain in the 2006 war, and those of four Palestinians, including Dalal Mughrabi, a woman guerrilla who led a bloody 1978 raid on Israel.

These prisoner exchanges somehow give further belief to the terrorist groups that Israel is weak and will submit to more such exchanges; it has been proved in the past that these groups have taken the policy of kidnapping in order to get their own prisoners released.

WASHINGTON, April 22 (UPI) — U.S. State Department officials disputed comments made by former U.S. President Jimmy Carter about Hamas’ views about Israel and peace. Hamas leaders, meanwhile, said they could accept a Palestinian state, but contradicted Carter’s statements about accepting Israel’s right to exist if approved by the Palestinian people, The Washington Times reported Tuesday.

“We accept a state on the (1967) line with Jerusalem as capital, real sovereignty and full right of return for refugees but without recognizing Israel,” al-Jazeera quoted Hamas leader Khalid Meshaal, who met with Carter, as saying.

And of course, no party in Israel will ever accept any of these terms. Israel has always disputed that Jerusalem will be the basis of a Palestinian state (a part maybe, but will never give up Jerusalem), Israel will never accept the full right of the refugees to return (that would be a demographic disaster that Israel would consider as a threat to its concept of majority Jewish rule; and Israel will never accept a negotiating partner who does not accept the right of Israel to exist.
The first 2 points can have multiple view points, but no person should accept a terrorist organization that has committed all sorts of atrocities, that teaches children how to hold weapons, and that refuses to accept the right of Israel to exist.

Palestinian militants in Gaza fire rockets daily at towns in southern Israel. The crude rockets wreak panic but rarely cause serious casualties. Gaza’s Hamas rulers have not been actively involved, but have done nothing to halt the rocket fire. Tuesday’s attack was the largest number of injuries sustained in a single such attack against Israel.

Attacks last week on Sderot, including one near a crowded day care center, led parents to pull their children out of school and brought demands for retaliation. Israel’s Security Cabinet last week rejected calls for a large-scale Gaza invasion but threatened to cut water, electricity and fuel supplies to Gaza. Tuesday’s attack was sure to bring calls for a strong Israeli reaction. Prime Minister Ehud Olmert has repeatedly said Israel would show no restraint in its efforts to stem the attacks from Gaza.

This is a ticklish situation for the Prime Minister. Now his army has been attacked, and yet he cannot prevent these rockets from getting fired on a regular basis. Cutting off food and other such supplies to Gaza carries its own political cost, and not very low either. On other hand, with the previous botched war against Hezbollah, the Prime Minister is under pressure to show his strong side. But attacking Gaza is not going to be a solution, after all, the Israelis themselves had left Gaza despite severe internal pressures; and any such attack will be sure to bring about a major conflict between Israel and Hamas, and there will be casualties, something that Ehud Olmert would really want to avoid. Tough choices, and no easy solution.

Despite pressure by the Bush Administration and the rest of the international community for Israel to withdraw many of its Jewish citizens from 220 hilltop settlements and outposts in the disputed West Bank, such a move could be so divisive in Israel that no Prime Minister, especially one as embattled as Ehud Olmert, would risk it. After months of dithering and judicial pressure, Israel’s government decided on Aug. 7 to remove two Jewish families squatting in Palestinian-owned buildings. At 6:20 a.m., riot police bashed in doors as teenage settlers on the roof hurled down stones, oil and eggs at the police, while Wagner played over loudspeakers. (As every Israeli knows, Wagner was Hitler’s favorite composer, and the music was a brutish way — for the benefit of TV news crews — for the settlers to draw a parallel between Israel’s security forces and the Nazis.)
The eviction itself went relatively smoothly, but the hard feelings it generated resound deep inside Israeli army barracks. The Israel Defense Forces (IDF) were initially assigned only to secondary tasks, such as manning roadblocks to stop religious Zionist sympathizers from joining their Hebron brethren. Still, when orders were given to the Duchifat Battalion to assist evicting the two settler families, 38 out of 400 soldiers initially refused to obey after many called their rabbis on cell phones. Eventually, all but eight relented. These “refuseniks,” as they were dubbed in the Israeli press, were slapped in the army prison for 14 to 28 days and some were banished from their élite combat unit. The incident has left lingering doubts over whom soldiers will obey: their commanding officers, or hard-line rabbis who believe it’s the destiny of Jews to occupy the Biblical lands of Judea and Samaria, even if they are now in disputed Palestinian territory? One senior IDF commander complains to TIME: “It seems like every soldier is consulting his own rabbi.” The more extremist rabbis, he says, “want to change the system,” bringing Israel’s vibrant secular society more in line with their orthodox views.

If this situation continues, Israel will find it difficult. Most Israeli politicians understand that a peace with the Palestinians will involve removing most Israeli settlers from the West Bank, and it would be the army that would be called out to help in such a operation. If such a trend of the army soldiers being swayed by rabbis continues, Israel will be in a difficult position.

For the first time in its history, the Palestinian Authority has published a policy platform that doesn’t include “armed resistance” to Israel as a core principle. A new government program presented by Palestinian president Mahmoud Abbas and prime minister Salaam Fayyad has drawn praise from peaceniks on both sides, and fresh scorn from Hamas, after the Arabic word muqawama was left out of the document for the first time since the PA was established in 1993. The program was presented to the Palestinian cabinet on Thursday, but details of it began to emerge only Friday.
An aide to Mr. Fayyad said Friday that the deletion didn’t mean Palestinians are any more accepting of the 40-year-old Israeli occupation of their lands. Instead, the new government will embrace what Mr. Abbas has called “popular struggle” while rejecting armed attacks on Israeli targets. “We have the right to refuse and resist the occupation, but our experience shows that peaceful, active resistance — like in the first intifada, which was absolutely non-violent — could be more effective,” said Jamal Zakut, a close confidante of Mr. Fayyad’s.

This is something that Israel will welcome. No matter what the current state of progress between the Palestinians and Israel, there is a large section of people in Israel who would like nothing better than to have a time of peace, and not be worried about terrorism and suicide bombings. Currently they have that due to the wall in the West Bank, but a long term peace is something that will enable the country to develop and grow economically much more.
Of course, any solution or a peace initiative still does not reconcile the changed status of the Gaza Strip where the Hamas rulers refuse to acknowledge any peace initiatives by the Fatah movement and will certainly find it hard to accept any accord that leaves portions of the West Bank, Gaza or Jerusalem with the Israelis, and Israel will not accept any agreement that removes control of Jerusalem from it.