HA’ARETZ 1. HEAVY PRESSURE ON HAMAS TO AGREE TO END TERROR ATTACKS. Organization’s agreement in principle sent to Egyptian envoy; Bush makes aggressive remarks: “Deal harshly and seriously” with Hamas.

2. “REFUSED TO CARRY OUT ORDERS” IN PALESTINIAN AUTHORITY – AND ALLOWED KASSAM FIRE FROM SOUTHERN GAZA STRIP. 3. CPI FALLS 0.5%: INTEREST RATES REDUCTION EXPECTED NEXT WEEK. 4. BEN-ELIEZER WITHDRAWS SUPPORT FOR PERES AND ANNOUNCES: I WILL RUN FOR TEMPORARY CHAIRMAN. 5. FIFA PRESIDENT: I WILL WORK FOR IMMEDIATE RESUMPTION OF INTERNATIONAL GAMES IN ISRAEL. HATZOFEH 1. Mofaz: We are prepared to consider withdrawing from Bethlehem in addition to withdrawal from Gaza. US LIKELY TO SEND SOLDIERS AS PART OF INTERNATIONAL FORCE IN JUDEA AND SAMARIA. Chairman of Senate Foreign Affairs Committee: US military likely to take active part in international force that will fight Hamas. Sharon: Israeli document of principles includes all 14 reservations – US not opposed to attacking “ticking bombs.” Naveh: Why have they stopped expelling terrorists? 2. JEWISH PROPERTY LEFT IN ARAB COUNTRIES – SEVERAL TIMES THE VALUE OF PALESTINIAN REFUGEES’ PROPERTY. Proven by data gathered ahead of London congress at end of month. Organizers insisting that issue be raised – if Palestinians claim compensation from Israel. 3. HIZBALLAH ENGINEER CAUGHT BY ISRAEL DEVELOPED THIN EXPLOSIVE BELT WHICH IS INCONSPICUOUS. Thus claim Palestinian sources. According to their account, the explosive belt, developed by engineer caught on weapons’ boat, allows bomber to wear a regular shirt. 4. NEVE-TZUF RESIDENTS WILLINGLY EVACUATE OUTPOST SET UP AT SITE OF TERROR ATTACK. Moshe Zar: Within 3 weeks, Gilad Farm will be moved to area where there is no disagreement. Bus used for living purposes removed from outpost in Mount Hebron area. High Court of Justice orders delay in evacuation of Tel-Haim outpost near Beit-El. 5. BEN-ELIEZER SURPRISES: I WILL RUN FOR LABOR LEADERSHIP. MA’ARIV 1. BUSH: ALL OUT WAR AGAINST HAMAS. Chairman of Senate Foreign Relations: “We may be forced to send US soldiers to the territories in order to fight terror ourselves.” OC Southern Command and Palestinian Police Commander meet in order to coordinate transfer of security responsibilities in Gaza. 2. FUAD: I WILL RUN AGAINST PERES. Ben-Eliezer fears that Peres will be elected temporary Labor Party Chairman – and then will try to remain in position until elections. YEDIOT AHRONOT 1. “WITHOUT ELIMINATIONS, WITHOUT TERROR ATTACKS.” – these are the ceasefire understandings being formed in negotiations between Egypt, Palestinians and Hamas. Despite this, Sharon declared yesterday: We will continue with eliminations. Warnings of terror attacks continue. 2. INFLATION: ZERO. May CPI down by 0.5%. Despite everything: Stock market jumps 4%, El-Al shares skyrocket. 3. FUAD RUNNING AGAINST PERES. Storm in Labor: Until yesterday he himself worked for appointment of Peres as temporary Chairman. ______________________________ SUMMARY OF EDITORIALS FROM THE HEBREW PRESS Yediot Ahronot comments on the plan for the Palestinians to assume security responsibility for all, or part, of the Gaza Strip. The editors cite Sderot Mayor Eli Moyal who said that, “While he doesn’t trust the Palestinians, he also knows that –with all due respect to the IDF – its prolonged presence in Gaza has not succeeded in preventing firing at Sderot.” The paper suggests that, “If from Sderot’s point-of-view, this seems like an attempt in which the cat will be asked to guard the cream, solely on the basis of Dahlan’s word of honor, the chance that this will succeed is greater than the certainty of the risk in which the residents live now.” Hatzofeh discusses the increased warnings regarding possible terrorist attacks and says that, “Neither Hamas nor Islamic Jihad plan to stop terrorist activities.” The editors refer to Abu Mazen’s statements that the Palestinian Authority would be willing to assume responsibility for security in agreed-upon areas and assert that, “As of now, the ‘Palestinian Authority ’ is not Abu Mazen but Yasser Arafat, the arch-terrorist.” The paper dismisses any Palestinian endorsement as an attempt to buy time in order to reorganize the terrorist onslaught against Israel. Yediot Ahronot, in its second editorial, suggests that the arrival of American inspectors to the region is the first indicator of a possible internationalization of the Israeli-Palestinian conflict, which the paper speculates may grow as US President Bush becomes increasingly distracted by next year’s reelection campaign. The editors believe that, “When Sharon initiates direct steps vis-?-vis the Palestinians, Israel’s international standing grows, as does its flexibility of action.” However, the paper avers that, “When the US is the only initiator, our dependence on the Americans grows,” and adds, “When despair increases over the sides’ inability to hold direct dialogue, statements on the internationalization of the conflict are liable to become reality.”