HA’ARETZ 1. Gaza Hamas leader to Ha’aretz: “1967 borders are only a stage in the struggle – all of Palestine is holy to Islam.” A-ZAHAR THREATENS: WE WILL KIDNAP OTHER ISRAELIS. IDF kills senior West Bank fugitive; Islamic Jihad threatens revenge. 2. BILL GATES ON FIRST VISIT TO ISRAEL: “ISRAEL – ALMOST LIKE SILICON VALLEY.” 3. INTEREST RATES RISE AGAIN. Bank of Israel Governor raises interest rates to 4%, overdraft becomes more expensive. HATZOFEH 1. In response to IDF in which senior Islamic Jihad terrorist in Samaria was eliminated: SIMCHAT TORAH IN SDEROT – KASSAM ROCKET BARRAGE. Last night: Terrorists launched five Kassam rockets at Sderot – IDF responded with artillery and jet fire in northern Gaza Strip. Sderot Mayor: Response to Kassams insufficient. Elimination of senior Islamic Jihad terrorist in Tulkarm prevented Simchat Torah terrorist attack. 2. ADMISSION IN JERUSALEM: WE FAILED IN STRUGGLE TO PREVENT HAMAS FROM PARTICIPATING IN PALESTINIAN ELECTIONS. Shots fired at IDF position near Neveh Tzuf; shooting and bombs along border with Gaza Strip. 3. OUTRAGE IN COMMUNITY OF TZOFIM: SEPARATION FENCE HAS CUT US OFF FROM SAMARIA. 4. TWO RESIDENTS OF BAKA AL-GHARBIYA REENACT MURDER OF KATHY DAVID. MA’ARIV 1. Bill Gates, in Ma’ariv interview: “ISRAEL IS HIGH-TECH SUPERPOWER.” World’s richest man arrives on first visit to Israel. “Main reason for Israeli high-tech success – military experience.” 2. UN begins to discuss sanctions on Damascus. BUSH: WE WILL NOT BE FORBEARING WITH SYRIA. US President: Military is last resort. IDF eliminates senior West Bank fugitive. YEDIOT AHRONOT 1. Islamic Jihad fires volley at Sderot. According to information in Israel’s hands: KASSAMS LAUNCHED ON ORDERS FROM DAMASCUS. After elimination of senior Islamic Jihad leader, Israel sent message to Assad and Abu Mazen: Work to prevent Kassam fire. Hariri report: UN Security Council formulating soft decision on Syria. 2. Microsoft Chairman Bill Gates in Yediot Ahronot interview: “AS FAR AS I’M CONCERNED, ISRAEL IS PART OF SILICON VALLEY.” On visit to Israel: “(…). Israel is doing fantastic things in technology field. You have many exceptional talents.” (…). 3. SETTLERS PROPOSE: SEPARATION FENCE OF CACTUSES. Security establishment to check idea. ____________________ SUMMARY OF EDITORIALS FROM THE HEBREW PRESS Yediot Ahronot suggests that, “Much depends on us if the new year will be blessed or cursed.” Yediot Ahronot, in its second editorial, comments on the annul tussle over how much can be cut from the defense/security budget. The editors believe that much could be saved from both defense/security budget waste and politically-motivated spending and diverted to social issues. Yediot Ahronot, in its third editorial, asserts that haredi Jews who want nothing to do with the state and can finance their own schools have no business demanding state funds for their schools. Hatzofeh accuses US President George Bush of hypocrisy for taking a strong line against Syrian support of anti-US terrorists in Iraq yet taking an accommodating line towards anti-Israeli Palestinian terrorism.