Israeli official links Netanyahu’s canceled U.S. trip to defense aid hold-up

JERUSALEM (Reuters) – A hold-up over a new U.S. defense package for Israel was behind Prime Minister Benjamin Netanyahu’s decision to forgo a meeting with President Barack Obama in Washington this month, a senior Israeli official said on Thursday.

Deputy Foreign Minister Tzipi Hotovely’s remarks contrasted with a statement by Netanyahu that cited his reluctance to risk being drawn into the U.S. presidential campaign as the reason for declining a White House offer to host him on March 18.

Current U.S. military grants to Israel, worth about $3 billion annually, expire in 2018.

Israel, which last year requested $5 billion in future annual aid but whose officials have since set their sights on $4 billion to $4.5 billion, says it needs to expand its military, rather than just upgrade technologies, given spiraling arms procurement it anticipates by arch-foe Iran and Arab states.

U.S. officials have given lower target figures of around $3.7 billion. The dispute prompted Israeli officials to hint that Netanyahu may bank on Obama’s successor for a better deal.

“There was a decision not to go to the president as long the agreement over the compensation package is not concluded,” Hotovely told Israel Radio, using a term linking the future U.S. aid to last year’s international nuclear deal with Iran, which brought sanctions relief that Tehran may use for arms purchases.

“The prime minister wants to honor the U.S. president by going when there is a basis, good news on the matter of the U.S. aid package,” she said. “This really has to be taken seriously.”

U.S. officials say they still hope for an agreement before Obama leaves office next January.

FRAUGHT RELATIONSHIP

The White House’s announcement on Monday that Netanyahu had turned down the meeting with Obama was seen as the latest episode in a fraught relationship that has yet to recover from deep differences over the Iran nuclear deal.

Some U.S. sources assessed that Netanyahu wanted the MOU concluded before meeting Obama and that the lag was among the reasons for not coming to Washington, where he was to have addressed the annual conference of the pro-Israel lobby AIPAC.

Vice President Joe Biden, in Jerusalem on Wednesday for discussions with Netanyahu that included the “Memorandum of Understanding” (MOU) on defense aid between 2018 and 2028, appeared to acknowledge Israel’s terms.

“We’re committed to making sure that Israel can defend itself against all serious threats, maintain its qualitative edge with a quantity sufficient to maintain that,” Biden said.

It was not clear if that signaled a deal was close.

U.S. negotiators have made clear that, while they want Israel to maintain a technological advantage over its neighbors, they differ over the level of risk of increased quantities of less-advanced arms in the hands of Washington’s Arab allies who seek to counter Iran.

(Writing by Dan Williams; Editing by Jeffrey Heller and Gareth Jones)

U.S. hopes to preserve two-state outcome for Israel, Palestinians

WASHINGTON (Reuters) – Having twice failed to achieve Israeli-Palestinian peace, the Obama administration is discussing ways to help preserve the prospect of an increasingly threatened two-state solution, U.S. officials said.

One possibility under discussion is to issue an outline of a deal to end the nearly 70-year-old conflict on such matters as borders, security, the status of Jerusalem and the fate of Palestinian refugees.

Such an outline could range from a brief description of core tradeoffs the two sides might need to make to a detailed set of “parameters” like those that former U.S. President Bill Clinton laid out for the parties in late 2000.

Under one scenario, the outline could be enshrined in a U.N. Security Council resolution to give it greater international standing for a future U.S. president or the parties whenever they might resume peace talks that collapsed in April 2014.

“It’s one of the ideas that they are talking about,” said a U.S. official who spoke on condition of anonymity.

Resorting to a U.N. resolution would require a major shift in long-standing U.S. policy, which has mostly opposed use of the United Nations as a forum for pressuring Israel. The United States has repeatedly insisted it is up to the two sides to directly negotiate over their differences.

Another possibility would be for U.S. President Barack Obama to make a speech laying out his principles for a settlement.

U.S. officials have no expectation peace talks will resume before the end of Obama’s term in January 2017 and they played down the odds of any quick decision on how the White House might help preserve a two-state solution.

“People in the government are asking the question what can we do to keep the two-state solution alive, and they’re generating ideas,” said a senior U.S. official.

The ideas had not yet risen to senior White House staff and Obama is focused on other issues including Islamic State, Iran and Cuba, the officials said.

Two separate peace efforts, by George Mitchell and U.S. Secretary of State John Kerry, have failed during Obama’s seven years in office.

TWO-STATE SOLUTION DYING ON OBAMA’S WATCH?

A two-state solution long seen as the most internationally acceptable outcome envisages a Palestinian state on most of the West Bank and Gaza Strip, lands Israel captured in a 1967 war, and an Israeli state that absorbs some of the settlements Israel built on occupied land in return for mutually agreed land swaps.

Such a solution appears remote because of ongoing Jewish settlement building; a split between the Palestinian Fatah and Hamas factions; preoccupation within the Palestinian Authority about who may succeed 81-year-old President Mahmoud Abbas; and a wave of Palestinian stabbings, shootings and car rammings of Israelis.

The Palestinian attacks have killed 28 Israelis and two U.S. citizens since October, while Israeli forces have killed at least 179 Palestinians, 121 of whom Israel says were assailants.

Current and former U.S. officials have warned that a failure to break the impasse could lead to greater conflict and that continued occupation of Palestinian land puts at risk Israel’s character as a Jewish and democratic state.

Former officials also cite a deepening cynicism on both sides regarding peace, making it ever harder to achieve.

“In the absence of negotiations, actions on the ground are making it more and more difficult to see how a two-state solution could be achieved,” said Martin Indyk, Obama’s former special envoy for the Israeli-Palestinian negotiations.

“I think there is a real concern on the part of the president and the secretary of state,” said Indyk, who is now executive vice president of the Brookings Institution think tank, “that instead of achieving a breakthrough to a two-state solution, the two-state solution will die on their watch.”

(Additional reporting by Patricia Zengerle; Editing by Howard Goller)

Biden says his family was near scene of Tel Aviv attack

JERUSALEM (Reuters) – U.S. Vice President Joe Biden said on Wednesday his wife Jill and their grandchildren were dining on a Tel Aviv beach when a Palestinian killed an American tourist with a knife and wounded 11 other people on the seafront “not very far” away.

Since October, Palestinian stabbings, shootings and car rammings have killed 28 Israelis and two U.S. citizens. Israeli forces have killed at least 179 Palestinians, 121 of whom Israel says were assailants. Most others were shot dead during violent protests.

“I don’t know exactly whether it was a hundred meters or a thousand meters,” Biden, on a visit to Israel, told reporters about Tuesday’s assault.

“It brings home that it can happen, it can happen anywhere, at any time,” he said, after meeting Israeli Prime Minister Benjamin Netanyahu in Jerusalem.

Violence has surged since Biden’s arrival in Israel on Tuesday as part of a regional visit. Two Palestinians, who Israel said opened fire and wounded one man in Jerusalem on Wednesday, and a Palestinian who the military said tried to stab soldiers in the occupied West Bank, were killed by Israeli forces.

On Tuesday, Biden was meeting former Israeli President Shimon Peres several blocks from where the Palestinian was running along the Tel Aviv beachfront stabbing pedestrians and motorists stuck in traffic.

Taylor Force, a 28-year-old Vanderbilt University graduate student and a U.S. military veteran who Biden said served tours of duty in Afghanistan and Iraq, was killed and 11 people were wounded before police shot the attacker dead.

“Let me say in no uncertain terms, the United States of America condemns these acts and condemns the failure to condemn these acts,” Biden said, with Netanyahu at his side, in remarks that appeared critical of Palestinian leaders.

Palestinian leaders say many Palestinian attackers have acted out of desperation in the absence of movement toward creation of an independent state. Israel says they are being incited to violence by their leaders and on social media.

Later in the day, Biden, who has visited the Gulf during his trip and plans to travel to Jordan next, was due to meet Palestinian President Mahmoud Abbas in the West Bank.

(Editing by Ralph Boulton)

Iran tests more missiles, says they are capable of reaching Israel

DUBAI (Reuters) – Iran’s Islamic Revolutionary Guards Corps (IRGC) test-fired two ballistic missiles on Wednesday that it said were designed to be able to hit Israel, defying U.S. criticism of similar tests carried out the previous day.

State television showed footage of two Qadr missiles being launched from northern Iran which the IRGC said hit targets 1,400 km (870 miles) away. Tests on Tuesday drew a threat of new sanctions from the United States.

“The reason we designed our missiles with a range of 2,000 km is to be able to hit our enemy the Zionist regime from a safe distance,” Brigadier General Amir Ali Hajizadeh was quoted as saying by the ISNA agency. The nearest point in Iran is around 1,000 km from Tel Aviv and Jerusalem.

Iranian agencies said the missiles tested on Wednesday were stamped with the words “Israel should be wiped from the pages of history” in Hebrew, though the inscription could not be seen on any photographs.

Israeli Defense Minister Moshe Yaalon told Israel Radio the tests showed Iran’s hostility had not changed since implementing a nuclear deal with world powers in January, despite President Hassan Rouhani’s overtures to the West.

“To my regret there are some in the West who are misled by the honeyed words of part of the Iranian leadership while the other part continues to procure equipment and weaponry, to arm terrorist groups,” Yaalon said.

The IRGC maintains dozens of short and medium-range ballistic missiles, the largest stock in the Middle East. It says they are solely for defensive use with conventional, non-nuclear warheads.

Tehran has denied U.S. accusations of acting “provocatively”, citing the long history of U.S. interventions in the Middle East and its own right to self-defense.

INTERNAL RIFT

The United States said it would raise Tuesday’s tests at the U.N. Security Council, where resolution 2231 calls on the Islamic Republic not to develop missiles capable of carrying nuclear warheads.

Washington also imposed sanctions against businesses and individuals in January over another missile test in October 2015. But the IRGC said it would not bow to pressure.

“The more sanctions and pressure our enemies apply… the more we will develop our missile program,” Hajizadeh said on state television.

The missile test underlined a rift in Iran between hardline factions opposed to normalizing relations with the West, and Rouhani’s relatively moderate government which is trying to attract foreign investment to Iran.

Rouhani’s popularity has soared since the nuclear deal in January, under which Tehran won relief from international sanctions in exchange for limiting its nuclear research. The president’s allies made strong gains in recent elections to parliament and the body that will elect the next supreme leader.

Foreign business delegations have since flocked to Tehran, but hardliners including senior IRGC commanders have warned that economic ties could strengthen Western influence and threaten the Islamic Republic.

Some criticized a $27 billion deal between the government and Airbus to add 118 planes to its aging civilian fleet, saying the money should be used to create jobs locally.

The Tasnim agency, which is close to the Guards, carried a photograph of reporters in front of the missile before launch. It quoted an IRGC officer as saying: “Some take photos with the French Airbus, but we take photos with native Iranian products”.

Washington said Tuesday’s missile tests would not themselves violate the Iran nuclear deal.

(Reporting by Sam Wilkin and Bozorgmehr Sharafedin; Additional reporting by Dan Williams in Jerusalem and Andrea Shalal in Washington; Editing by Hugh Lawson and Andrew Heavens)

Palestinian kills U.S. tourist in stabbing spree on Tel Aviv boardwalk

TEL AVIV (Reuters) – An American tourist was stabbed to death and at least nine other people were wounded by a Palestinian armed with a knife on a popular boardwalk in Tel Aviv on Tuesday, authorities said, while U.S. Vice President Joe Biden was in a meeting a few miles away.

The attack took place in the popular Jaffa port area, which is a favorite spot among tourists. The Magen David Adom ambulance service said four of the wounded had severe injuries.

“A terrorist, an illegal resident who came from somewhere in the Palestinian territories, came here to Jaffa and embarked on a run … along the boardwalk. On his way he indiscriminately stabbed people,” Tel Aviv Mayor Ron Huldai told Army Radio.

He said a police officer eventually caught up with the attacker and shot him dead.

The U.S. State Department strongly condemned the attack and identified the slain American as Taylor Allen Force.

“As we have said many times, there is absolutely no justification for terrorism. We continue to encourage all parties to take affirmative steps to reduce tensions and restore calm,” it said in a statement.

Biden arrived in Israel late on Tuesday for a two-day visit, and was meeting former Israeli President Shimon Peres in Jaffa around the time of the stabbings.

Tuesday also saw three other attacks by Palestinians.

In Jerusalem, a Palestinian opened fire at Israeli police on a crowded street, seriously wounding two officers, before being shot dead, and a 50-year-old Palestinian woman who tried to stab Israeli police officers was also shot and killed.

In the Tel Aviv suburb of Petah Tikva, a Palestinian entered a store and stabbed an Israeli. The wounded man and the store owner together overpowered the attacker and fought him off using the same knife. The attacker died of his wounds, a police spokesman said.

Since October, Palestinian stabbings, shootings and car rammings have killed 28 Israelis and two Americans. Israeli forces have killed at least 177 Palestinians, 119 of whom Israel says were assailants. Most others were shot dead during violent protests.

(Reporting by Rami Amichay; Additional reporting by Washington Newsroom; Writing by Ari Rabinovitch; Editing by Kevin Liffey and Sandra Maler)

About half of Israeli Jews want to expel Arabs, survey finds

JERUSALEM (Reuters) – Nearly half of Israeli Jews believe Arabs should be expelled or transferred from Israel, according to a survey on the political views of Jewish religious and secular communities.

The poll released on Tuesday by the Washington-based Pew Research Center, a non-partisan think tank, also found that many Israelis – Jews and Arabs – appeared to have lost hope for a two-state solution to the Israeli-Palestinian conflict.

Forty-eight percent of Israeli Jews said they agreed with the statement that Arabs should be expelled or transferred from Israel, where they make up 19 percent of the population of 8.4 million.

While 54 to 71 percent of Jews who defined themselves as ultra-Orthodox, religious or “traditional” supported such a step, only about 36 percent of the secular community did.

President Reuven Rivlin called the findings a “wake-up call for Israeli society”.

The survey also addressed the role of religion in a modern-day democracy founded as a Jewish state, exposing wide gaps between Orthodox and non-religious Jewish respondents.

According to the poll, 89 percent of Israel’s secular Jews want democratic principles to outweigh Jewish ritual law when the two clash. An identical percentage of ultra-Orthodox Jews take the opposite view.

In addition, about 8 in 10 Arabs complained of heavy discrimination in Israeli society against Muslims, the largest religious minority, while 79 percent of Jews questioned said Jewish citizens deserved preferential treatment.

“It pains me to see the gap that exists in the public’s consciousness – religious and secular – between the notion of Israel as a Jewish state and as a democratic state,” Rivlin said in a statement after receiving the report. “A further problem is the attitude toward Israel’s Arab citizens.”

In the poll, 9 percent of Jews identified themselves as ultra-Orthodox, 13 percent as religious, 29 percent as ‘traditional’ and 49 percent as secular.

It found devout Jews largely lean to the right politically, while secular Jews mainly see themselves as centrists.

Among the many divides on social and religious issues, the vast majority of ultra-Orthodox and religious Jews supported a long-standing shutdown of most public transportation on the Jewish Sabbath, while 94 percent of secular Jews took the opposite view.

Most secular Jews saw themselves as “Israelis first”, while 91 percent of ultra-Orthodox and 80 percent of religious Jews in general said they were “Jews first”.

About 40 percent of Israeli Jews believe a way can be found for Israel to co-exist with a future Palestine, while a similar percentage believe this is not possible, according to the poll.

Among the Arab population, about half saw such co-existence as possible, compared with 74 percent in 2013.

Israeli-Palestinian peace talks collapsed in 2014, just before a seven-week war between Israel and Palestinian armed groups in Gaza.

The researchers conducted 5,601 face-to-face interviews with 3,789 Jews, 871 Muslims, 468 Christians and 439 Druze in Israel from October 2014 to May 2015.

(Reporting by Jeffrey Heller; Editing by Kevin Liffey)

Egypt parliament expels MP for dining with Israeli ambassador

CAIRO (Reuters) – Egypt’s parliament voted on Wednesday to expel an independent lawmaker who invited the Israeli ambassador in Cairo for dinner, drawing widespread criticism and prompting a fellow deputy to attack him with his shoe.

Speaker Ali Abdelaal announced that 465 lawmakers, out of 490 who attended the session voted to expel Tawfik Okasha from the legislature, less than two months after it was sworn in.

Egypt was the first of a handful of Arab countries to recognize Israel with a U.S.-sponsored peace accord in 1979, but Egyptian attitudes to their neighbor remain icy.

Israel has an ambassador stationed in Cairo but many Egyptian officials make a point of keeping their distance and the embassy has been the focal point of protests in the past.

Okasha, a television presenter and lawmaker known for courting controversy, hosted the Israeli ambassador Haim Koren for dinner at his home in the northeastern Dakhalia province last week. He made the invitation live on his television show.

The move triggered outrage in the media and in Egypt’s parliament, with several lawmakers demanding on Sunday that Okasha be dismissed and one colleague, Kamal Ahmed, hurling his shoe during the session in a fit of anger.

On Wednesday, lawmakers voted to remove him permanently. Witnesses said Okasha tried to get into the session to apologize to colleagues before it was too late but was barred by security on the orders of the speaker.

He sat outside, watching the vote on a screen, and left shortly before the session closed, declining to comment.

In comments earlier this week, Okasha said he had done nothing wrong as Egypt has diplomatic ties with Israel.

(Reporting by Ahmed Aboulenein and Mahmoud Mourad; Editing by Lin Noueihed and Alison Williams)

Palestinians turn to makeshift guns in escalation of street violence

By Dan Williams and Ismael Khader

JERUSALEM (Reuters) – During previous rounds of Palestinian violence, Israeli raids on the occupied West Bank would turn up small arsenals of military assault rifles. Now hauls more often include what look like toy guns and the tools required to make them lethal.

After years of seizures that have choked the supply of unlicensed M-16s and Kalashnikovs in the territory and raised black-market prices, some Palestinians are turning to improvised firearms to carry out street attacks on Israelis.

Five months into a series of killings by Palestinians that have mainly involved stabbings and car-rammings, some are stepping up the assaults by using such makeshift guns.

This escalation could pose problems for authorities on both sides, who are seeking to keep the bloodshed from spilling over into another uprising that could draw in armed Palestinian factions and trigger sweeping Israeli crackdowns.

The shift was illustrated by the haul from an Israeli raid on a foundry in the occupied West Bank this week; photos released by Israel’s Shin Bet intelligence service showed a sniper rifle held together by duct tape, a Wild West-style long gun with a silencer welded on, as well as a lathe machine tool.

The foundry may be a testament to the effectiveness of past raids, by both Israeli and Palestinian security services.

“A genuine M-16 now costs 60,000 to 70,000 shekels ($15,000-$18,000) on the street, whereas an improvised gun can cost as little as 2,000 shekels ($512),” one Palestinian with knowledge of the trade told Reuters. “For a young person looking to carry out an attack with limited resources, the choice is obvious.”

The crudity of the cobbled-together guns may offer scant comfort to Palestinian and Israeli security officials.

Palestinian leaders and international powers have already said Israel has often used excessive force against assailants, many of them youths, though Israel has rejected this, saying it has prevented lethal attacks on civilians and security forces.

Security experts cautioned that Israel was likely to be even less restrained should its forces or citizens come under regular attack with guns, regardless of how lethal they are.

“It’s one thing for a soldier to face someone who is trying to stab him with scissors, quite another to face a gunman – he can never know whether if there is more ammunition, if the gun is still a threat, so he is likelier to shoot,” said Amy Ayalon, who headed the Shin Bet between 1996 and 2000, when the last Palestinian revolt against Israel erupted.

“So the response, on site, tends to be harsher, and the political echelon will be forced to back it up.”

OVER 200 KILLED

Palestinian attackers have killed 28 Israelis and a U.S. citizen since October. Israeli security forces have killed at least 172 Palestinians, 114 of whom Israel says were assailants, while most others were shot dead during violent protests.

Tensions have been stoked by various factors including a dispute over Jerusalem’s al-Aqsa mosque compound and the failure of several rounds of peace talks to secure the Palestinians an independent state in Israeli-occupied territory.

Palestinian leaders have said that with no breakthrough on the horizon, desperate youngsters see no future ahead. Israel says young Palestinians are being incited to violence by their leaders and by Islamist groups calling for Israel’s destruction.

Two Palestinians who killed an Israeli policewoman and wounded another in Jerusalem last month before they were shot dead were armed with improvised guns known as “Carlos”, Israeli authorities said.

Carlos – simple knock-offs of Swedish-made Carl Gustav machine-pistols made in metal foundries – are among the cheapest makeshift guns to buy on the black market, say the authorities.

According to one Israeli security source, the relatively low Israeli death toll in the attack was partly due to the gunmen’s failure to fire rapidly, possibly due to the Carlos jamming.

Israel is also holding two Palestinian brothers from the West Bank city of Hebron for four gun attacks that wounded two soldiers and two civilians. The Shin Bet says they used a Carlo and an improvised sniper rifle with a silencer fashioned out of an oil can as instructed by a video they found on the Internet.

A spokesman for the Palestinian Security Services in the West Bank said they were aware makeshift weapons were being manufactured there.

“Making weapons locally is common everywhere in the world and we are moving against the sources of such weapons because they represent a risk,” Adnan Al-Dmairi told Reuters.

Improvised guns can be air-rifles converted to shoot real bullets rather than pellets, the Palestinian source said. According to one Shin Bet official, some West Bank armourers cannibalize parts from broken M-16s or Kalashnikovs and reassemble them as workable composites, with missing components manufactured in private workshops. These can sell for around 5,000 shekels ($1,280) on the Palestinian black market.

“Obviously such weapons will not be as reliable as a complete factory-made gun,” the Shin Bet official told Reuters. “Most of the recent gun attacks employed improvised firearms. It appears that in many cases they malfunctioned.”

(Writing by Dan Williams; Editing by Jeffrey Heller and Pravin Char)

Israeli archaeologists discover fabrics dating to time of David and Solomon

Archaeologists from Tel Aviv University have discovered artifacts dating back to the time of David and Solomon, the school announced this week.

Tiny pieces of fabric, seeds and leather are among the 3,000-year-old artifacts that the excavation team unearthed, the university said Wednesday in a news release.

The fabrics were a particularly important discovery, the school said, as they provide the first glimpse into what Holy Land inhabitants wore during that time period.

“No textiles have ever been found at excavation sites like Jerusalem, Megiddo and Hazor, so this provides a unique window into an entire aspect of life from which we’ve never had physical evidence before,” Dr. Erez Ben-Yosef, who led the excavation team, said in a statement.

The archaeologists were digging at copper mines in the Timna Valley, which some believe to be the location of King Solomon’s mines. The university said the desert climate of southern Israel helped preserve the artifacts, which included scraps of bags, tents, ropes and clothing.

In a statement, Ben-Yosef said the broad collection of textile fragments helped illustrate the society of the Edomites, who are believed to have worked in the mines.

The Bible says the Edomites were Esau’s descendants and often sparred with the Israelites.

Among the discoveries were intricately decorated “luxury grade fabric,” which Ben-Yosef said would have been worn by the skilled craftsmen whose duties involved smelting copper from ore.

“If a person had the exceptional knowledge to ‘create copper,’ he was considered well-versed in an extremely sophisticated technology,” Ben-Yosef said in a statement. “He would have been considered magical or supernatural, and his social status would have reflected this.”

The university said the excavation team also discovered linen, which was not produced in Timna and suggests the Edomites had likely set up trade networks. The team also discovered grain and fruit seeds, and modern advances will allow them to reconstruct wine typical of that period.

Hamas not seeking a war with Israel, says top official

GAZA (Reuters) – A senior leader of the Islamist group Hamas said the Palestinian movement was not seeking a new war with Israel and insisted a network of tunnels it is digging, some of which have reached into Israel in the past, was “defensive”.

Speaking to members of the Foreign Press Association in Gaza, Mahmoud al-Zahar, a medical doctor seen by many as a hardliner, suggested the prospects of reconciliation with the rival Fatah party of President Mahmoud Abbas were slim, despite years of international efforts to forge unity.

“I think nobody here in the region is looking for a war,” said Zahar, 71, who has survived two Israeli assassination attempts, one of which, in 2003, killed his son.

“We are not looking for any confrontation with Israel, but if they are going to launch an aggression we have to defend ourselves,” he told reporters late on Wednesday.

Hamas seized control of Gaza in 2007 after a brief civil war with Abbas’s forces. It maintains strict security over the coastal territory, where more than 1.9 million people live. Zahar is one of Hamas’s founders and one of its most senior figures in Gaza, regarded as close to the military wing.

The movement has, since its founding in 1987, advocated the destruction of Israel, seeing all of historic Palestine, from the Jordan River to the Mediterranean, as its land.

However, some of its leaders have indicated in recent years that they would accept a Palestinian state in Gaza, the West Bank and East Jerusalem, captured by Israel in a 1967 war, in return for a long-term truce with their neighbor.

Israel regards the truce idea as a ploy and will not negotiate with Hamas, which the EU and United States list as a terrorist group.

Asked why Hamas was building tunnels, Zahar said they were defensive and suggested they were nothing against the might of the U.S.-supplied Israeli military.

“You are speaking about tunnels? You are not speaking about F-35 (fighter planes)? You are not speaking about the nuclear bomb in Israel… The tunnels are a matter of self-defense,” he said.

Hamas’s armed wing has lost 10 fighters this year in tunnel collapses. In strongly worded speeches, the group’s leaders have pledged to pursue the tunnel building, prompting alarm in Israel, which has stepped up efforts to find the tunnels and stop them reaching its territory.

The heightened tension on both sides has fueled fears of another war, which would be the fifth since Hamas won Palestinian elections in 2006. The last war, in July-August 2014, left more than 2,100 Palestinians dead, most of them civilians, while 73 Israelis, nearly all soldiers, were killed.

INTERNAL SPLIT

With an Israeli-Egyptian blockade on Gaza making it difficult for goods and people to move in and out of the territory, Hamas and Fatah have made efforts to reconcile their differences and form a functioning unity government.

Yet the latest round of discussions in the Qatar capital Doha has become bogged down, despite early signs of progress, and Zahar gave the impression that a deal was some way off.

He said Abbas and Fatah were not sincere about achieving reconciliation, a charge Fatah threw back. He also vowed that his group would never recognize the state of Israel, which Abbas and Fatah have done and want Hamas to do.

“They (Fatah) have no will to achieve an agreement. There is no intention,” he said.

The blockade on Gaza and the breakdown of relations with Fatah have created huge strains on the economy in Gaza. Since Fatah controls the budget from the West Bank, it has so far resisted making payments to security forces and other state employees in Gaza who were hired by Hamas since 2007.

As a result, Hamas is heavily dependent on support from abroad, including Qatar, Saudi Arabia and Iran. While Saudi and Iran are at odds, Zahar said Hamas was not taking sides.

“We are looking to have good relations with everybody,” he said. “We will not play any factor or element in the internal or external confrontation between these countries.”

(Editing by Hugh Lawson)