Binyamin Netanyahu threw down the gauntlet to the US last night, grudgingly agreeing to a limited Palestinian state that would be demilitarised and not in control of its airspace or borders. The hawkish Prime Minister insisted that Israel would never give up a united Jerusalem as its capital, and said that established Jewish settlements in the West Bank would continue to expand - despite explicit objections from Washington.
Leaders gather for Shanghai talks
Chinese President Hu Jintao and other leaders are gathering in Russia for the ninth Shanghai Co-operation Organisation summit. Some will also attend the first summit of the four emerging economies - Brazil, Russia, India and China. The main agenda item at the meetings in Yekaterinburg will be how to deal with the global economic crisis.
Netanyahu wants demilitarized PA state
Prime Minister Binyamin Netanyahu lifted the shroud from his diplomatic endgame on Sunday night, saying at the BESA Center at Bar-Ilan University that he would support a Palestinian state if he received international guarantees that it would be demilitarized, and if the Palestinians accepted Israel as the Jewish homeland.