Recent developments in the region:

King of Bahrain offers unconditional dialogue in July

Gaddafi says won’t leave Libya, wants political solution

Syria releases political detainees as Washington says Damascus has credibility problem

Mubarak, sons to stand trial in August

Efforts are on in search of culprits who attacked UNIFIL

Israeli companies have been purchasing oil from Tehran for years

Developments in the political arena have been recently taking place in the Arab world:

Kingdom of Bahrain:

Bahrain's King Hamad bin Isa al-Khalifa called for talks on reform involving all parties in the Gulf Arab state "without preconditions" from July 1, the state news agency said on Tuesday.

The offer comes as the government prepares on Wednesday to lift a state of emergency imposed in March to break up pro-democracy protests inspired by uprisings that brought down veteran rulers in Egypt and Tunisia.

The government is also hoping to get back its Formula One race. The prestigious March event in the racing calendar was cancelled because of the unrest but a meeting of the sports governing body on Friday could reinstate it for later this year.

"The king called on everyone to take part ... to push forward reform for development in all areas and to firmly anchor the bases of the reform process," the Bahrain News Agency said.

It quoted the king as saying in a speech to Bahraini journalists that the talks would be "comprehensive, serious and without preconditions". Crown Prince Salman offered talks that could lead to parliamentary reforms during the unrest.

On Tuesday military prosecutors also summoned four members of the main opposition party Wefaq, including its leader, as well as rights activist Nabeel Rajab for questioning.

They were released after several hours, acquaintances said. The government at one stage, after imposing martial law, threatened to close down Wefaq.

Bahrain called in Gulf Arab forces in March, and has said the Saudi and Emirati forces would remain in the country indefinitely to help face a perceived threat from Shiite Muslim power Iran, across a short stretch of water from Bahrain.

Bahrain says Iran was behind the protest movement, which was dominated by the country's majority Shiites.

The authorities unleashed a campaign of detention and dismissals during martial law that has affected thousands of people who took part in the protests, most of them Shiites.

Dozens of Shiite places of worship have also been demolished and four people have died in custody.

Twenty-one opposition figures -- seven of whom are abroad -- are on military trial on charges of seeking to overthrow the system. Rights activists say they were tortured.

U.S. President Barack Obama criticized the crackdown in a speech this month, saying the government should begin dialogue with peaceful opposition leaders.

The king praised the National Unity Rally, a government-backed Sunni group that emerged during the unrest as a counterweight to Shiite opposition groups.

The rally has said Wefaq would have to change its leadership before political reconciliation would be possible and Sunni Islamist groups have campaigned for Wefaq to be ostracized and harsh sentences in the ongoing military trials.

Former Wefaq MP Jasim Husain welcomed the announcement.

"I'm quite upbeat and pleased that the king made the offer on the eve of a return to normal conditions," he said. "Given that the future of the country is at stake, I think we can overcome the problems."

But an opposition activist who declined to be named said the speech lacked substance.

The king did not specify parameters, talking in general terms of the need to improve government and parliament.

"Reform is the project that we have not and will not flinch from," he said. "Who does not want more efficient government performance? Who does not want more effective legislative representation? Or political associations and civil society groups that work in the framework of national unity and the rule of law?"

Libya:

Muammar Gaddafi is emphatic he will not leave Libya, South African President Jacob Zuma said on Tuesday after talks with the Libyan leader that left prospects for a negotiated end to the conflict looking dim.

But new questions emerged over how long Gaddafi could hold on after a senior U.N. aid official said shortages of food and medicine in areas of Libya controlled by Gaddafi amounted to a "time bomb."

Within hours of Zuma's departure from Tripoli late on Monday, Libyan television reported that NATO aircraft had resumed attacks, striking what it called civilian and military sites in Tripoli and Tajoura, just east of the capital.

Zuma was in Tripoli to try to revive an African "roadmap" for ending the conflict, which started in February with an uprising against Gaddafi and has since turned into a war with thousands of people killed.

The talks produced no breakthrough, with Gaddafi's refusal to quit -- a condition the rebels and NATO have set as a pre-condition for any ceasefire -- still the sticking point.

"Col. Gaddafi called for an end to the bombings to enable a Libyan dialogue," Zuma's office said in a statement. "He emphasized that he was not prepared to leave his country, despite the difficulties."

Zuma also said Gaddafi's personal safety "is a concern" -- a reference to NATO strikes which have repeatedly hit the Libyan leader's Bab al-Aziziyah compound and other locations used by the Libyan leader and his family.

Now in its fourth month, Libya's conflict is deadlocked on the ground, with anti-Gaddafi rebels unable to break out of their strongholds and advance toward Tripoli, where Gaddafi appears to be firmly entrenched.

Rebels control the east of Libya around the city of Benghazi, Libya's third-biggest city Misrata, and a mountain range stretching from the town of Zintan, 150 km (95 miles) south of Tripoli, toward the border with Tunisia.

Speaking in the main rebel stronghold of Benghazi where he was opening a consulate, Italian Foreign Minister Franco Frattini said he had pledged an aid package for the rebels worth hundreds of millions of euros.

"I think the Gaddafi regime is over and I firmly believe that it is over for a simple reason: we are talking about a person whose closest friends are defecting. He lost his legitimacy in Libya," Frattini said.

Western powers have said they expect Gaddafi will be forced out by a process of attrition as air strikes, defections from his entourage and shortages take their toll.

Panos Moumtzis, the U.N. humanitarian coordinator for Libya, told Reuters in Tripoli that some food stocks in areas under Gaddafi's control were likely to last only weeks.

"I don't think there's any famine, malnutrition. But the longer the conflict lasts the more the food stocks supplies are going to be depleted, and it's a matter of weeks before the country reaches a critical situation," Moumtzis said.

"The food and the medical supplies are a little bit like a time bomb. At the moment it's under control and it's ok. But if this goes on for quite some time, this will become a major issue," he said.

Gaddafi says his forces are fighting armed criminal gangs and al-Qaeda militants, and has described the NATO intervention as an act of colonial aggression aimed at grabbing Libya's plentiful oil reserves.

Libyan television showed Gaddafi welcoming Zuma, his first public appearance since May 11. Speculation had been swirling that Gaddafi was injured in a NATO strike or had fled Tripoli.

In London, British-based opposition activist Noman Benotman said Libyan forces in Tripoli had arrested two prominent Islamist opponents of Gaddafi, Sami al-Saadi, the spiritual leader of the now defunct Libyan Islamic Fighting Group (LIFG), and the group's former deputy leader Khalid al-Sharif.

There was no immediate confirmation of the report. The LIFG waged an insurgency against the state in Libya's east in the 1990s and made several failed attempts to assassinate Gaddafi.

Saadi and Sharif were among several hundred former LIFG men freed from long prison terms in the last three years under reforms to foster reconciliation with opposition groups.

A Reuters photographer in Misrata said there was heavy fighting in the suburb of Dafniyah, in the west of the city, where the front line is now located after rebel fighters drove pro-Gaddafi forces out of the city.

Speaking from a field hospital near the front line, she quoted medical workers as saying one person had been killed and 29 people had been injured so far on Tuesday.

"Gaddafi's forces are firing Grad rockets," she said. "The rebels tried to advance, and Gaddafi's forces pushed back." Rebel fighters, out of their familiar urban battleground, were being outgunned, one of their spokesmen said.

"The situation is getting more difficult for the revolutionaries because fighting is going on in open places. They do not have the same heavy weapons as the (pro-Gaddafi) brigades," the spokesman, Abdelsalam, said from Misrata.

There were reports too of clashes between rebels and forces loyal to Gaddafi in the Western mountains.

A rebel spokesman in the town of Zintan told Reuters by telephone: "Fighting took place last night in (the village of) Rayayna, east of Zintan ... It continued until the early hours of this morning. Both sides used mortars."

"The revolutionaries do not want to intensify attacks in the area for fear of harming civilians still living there," said the spokesman, called Abdulrahman.

He urged NATO to take a more active role by targeting pro-Gaddafi forces from the air.

Using a makeshift system of citizens' band radios and Skype, local rebels have been passing on government positions to NATO via the rebel headquarters in Benghazi, eastern Libya.

"NATO's performance is still very weak. Its operations are very slow despite the fact that the local (rebel) military council has provided it with all necessary information about the brigades' positions," said Abdulrahman.

In an apparent effort to generate an atmosphere of business as usual, official Libyan media said tourism officials met on Tuesday to examine preparations for the summer season, discussing topics such as summer camps and public parks.

Syria:

Syria Wednesday freed hundreds of political prisoners, a rights activist said, a day after President Bashar al-Assad decreed a general amnesty that the opposition has dismissed as insufficient.

"Under the amnesty, hundreds of people have been released. Fifty of them are from Banias, including the 76-year-old poet Ali Derbak," said Rami Abdel Rahman, head of the London-based Syrian Observatory for Human Rights.

But "thousands of political prisoners remain in jail and are to be released at any time," he added.

Leaders of the communist Labor Party were unable to benefit from the amnesty, however, as the decree excluded people convicted of joining "an organization to change the social and economic status of the state," said the activist, reached by telephone.

On Tuesday, Assad issued the order for a general amnesty for Muslim Brotherhood members and political prisoners to be released, following two months of deadly anti-regime protests.

More than 1,100 civilians have been killed and at least 10,000 arrested since protests against Assad's autocratic government erupted in mid-March, human rights organizations say.

Syrian opposition groups meeting in Turkey on Wednesday to plan for Assad's demise denounced "massacres" by his forces and snubbed the amnesty offer.

The three-day gathering -- titled "Conference for Change in Syria" -- opened with the Syrian national anthem and a minute of silence for "the martyrs" killed in bloody crackdowns on street protests simmering in Syria.

"The Syrian people are calling for the fall of the regime," said Melhem al-Durubi, the head of the Muslim Brotherhood delegation in the coastal resort of Antalya.

"He should simply leave," he said, adding that Assad "should be tried for his crimes."

Speakers said Assad's amnesty offer did not go far enough and came too late.

"We demanded this amnesty several years ago," said Abdel Razak Eid, an activist from the Damascus Declaration, a reformist group launched in 2005 to demand democratic change, "but it's late in coming."

With about 300 opposition groups gathered -- most living in exile -- speakers at the conference condemned "massacres" of civilians and urged Assad's departure.

"The regime is not legitimate and has no longer a ground to stay on," said Dugmush Dia al-Din, a 25-year-old student who came from Damascus, who has been jailed twice for participating in the revolt.

International response to Tuesday's presidential decree was tepid at best.

US Secretary of State Hillary Clinton said Assad had still not done enough.

"He has not called an end to the violence against his own people, and he has not engaged seriously in any kind of reform efforts," Clinton said.

Former colonial ruler France said Damascus authorities needed to take a much bolder change of direction after more than 1,100 deaths in the crackdown on generally unarmed demonstrators.

French Foreign Minister Alain Juppe demanded "more ambitious and bolder" action from Syria. "I fear that it might already be too late," he told France Culture radio.

Turkey, while not dismissing the decree outright, also asked for deeper change.

"I hope this is the first step of a comprehensive reform," said Foreign Minister Ahmet Davutoglu in a television interview. "This step is important, like a signal rocket."

Syria's official SANA news agency said the amnesty for political prisoners would extend to the Muslim Brotherhood, membership of which has been punishable by death in Syria since it led a bloody uprising against the rule of the current president's father Hafez al-Assad in the 1980s.

Syria meanwhile denied on Wednesday that a boy aged 13, whom opposition activists say died under torture, had been abused by security forces, labeling the accusations as lies.

A medical report published by Syrian official media said three bullets killed teenager Hamza al-Khatib and that other apparent wounds on his body were due to decomposition, not security force brutality.

"The report closes the door on the lies and allegations and shows the truth," said the official news agency SANA.

Last week, pro-democracy activists dedicated a page on Facebook to the boy, saying he was "tortured and killed" by security forces in the southern region of Daraa, a flashpoint of protest against President Bashar al-Assad.

The activists said the boy had disappeared since taking part in a demonstration on April 29, which he decided to join after police killed his cousin.

The US-based Human Rights Watch meanwhile prepared to release a report detailing a raft of abuses in Daraa.

HRW said its report showed abuses in the flashpoint region were "not only systematic but implemented as part of a state policy" and likely to "qualify as crimes against humanity."

The government insists the unrest is the work of "armed terrorist gangs" backed by Islamists and foreign agitators.

The U.S. State Department said Syria has a credibility problem as Damascus unveils an amnesty program the same day it was accused of crimes against humanity.

The official Syrian Arab News Agency reported that Syrian President Bashar al-Assad announced a general amnesty for crimes committed before Tuesday.

Assad, in an apparent attempt to appease protester demands this year sacked his Cabinet, passed a law describing the right to protest, dismantled a controversial security agency and lifted a state of emergency in place since the 1960s.

On the same day as the amnesty announcement, Human Rights Watch, in a 57-page report, accused the Syrian government of crimes against humanity.

Mark Toner, a spokesman for the State Department, said the Syrian government had an obvious problem with credibility.

Assad said he was releasing several hundred political prisoners, though Toner suggested that was nothing more than window dressing.

"We need to see all political prisoners released and we need to see an end to the violence that Syrian forces have been continually carrying out against civilian populations," he said. "And then we need to see meaningful movement towards reform and an effort to engage the opposition in a meaningful way and listen to their concerns and attempt to address them."

Foreign media are barred from Syria. The official news agency describes the conflict as an insurgency.

Egypt:

Former President Hosni Mubarak, who held absolute power in Egypt for nearly 30 years, goes on trial Aug. 3 charged with corruption and intentionally killing protesters, a court official said on Wednesday.

The ousted leader's two sons will be tried at the same time on charges of corruption.

The Middle East News Agency said Abdel-Aziz Omar, head of the Court of Appeals, set the trial date that will put Mubarak and his sons in the dock six months after the former president transferred power to a military council on Feb. 11.

Mubarak's ouster caught the United States off guard and scrambling to revise its policy toward the Arab world's most populous country and a steadfast Washington ally.

The revolt in Egypt followed quickly after a similarly surprising uprising in Tunisia that forced that country's longtime leader from.

Since Mubarak's ouster ongoing revolts have swept Yemen, Libya and Syria, but entrenched leaders in those countries still cling to power and have been responsible for widespread violence and killings of their own people who are demanding democratic reforms.

Mubarak could face the death penalty if convicted. At least 846 protesters were killed during the 18-day revolt.

The location of the ousted leader's trial remained unclear, given that a government-appointed panel of physicians determined on Tuesday that Mubarak was too ill to be jailed while awaiting his appearance in court.

The doctors said Mubarak's heart condition put him at risk of a sudden attack. The panel also reported to the country's general prosecutor that the 83-year-old former president was suffering from depression. Mubarak has been in custody at a hospital in the Red Sea resort of Sharm el-Sheikh since April.

Since Mubarak's ouster, tens of thousands of protesters have demonstrated repeatedly to press for a trial that would hold Mubarak accountable.

"The trial is not taking place as part of a smooth judicial process, but only in response to heavy pressures," says Bahey-eldin Hassan, director of the Cairo Institute for Human Rights Studies.

The case, however, marks the first time in modern history that an Arab leader has been put on trial by his own people. Iraq's leader Saddam Hussein was toppled during the 2003 U.S. invasion.

He was captured by U.S. forces and sentenced to death three years later by an Iraqi court that was under the quiet supervision of U.S. officials.

Mubarak's prosecution has been complicated by health concerns. He has been interrogated in the hospital, but an order by the prosecutor to transfer him to prison during the investigation was overturned on grounds the prison health facilities were not sufficient to treat the former president's ailments.

The charges against Mubarak assert he "conspired with the former security chief and other senior police officers" already on trial in a criminal court "to commit premeditated murder, along with attempted murder of those who participated in the peaceful protests around Egypt."

The charges said Mubarak and the other officials were involved in "inciting some policemen and officers to shoot the victims, running some of them over to kill them, and terrorizing others."

Mubarak and his sons also were charged with abusing power to amass wealth and enrich associates and of accepting bribes.

A close associate of Mubarak, Hussein Salem, also was charged with bribery. The Mubaraks are accused of taking bribes in return for helping Salem with business deals. He has fled the country.

The Mubarak sons are jailed in Cairo and facing investigation for other possible crimes.

Lebanon:

The commander of the UN Interim Force in Lebanon (UNIFIL) said Monday that the peacekeepers were determined to pursue their mission in south Lebanon despite a bloody attack against the Italian contingent last week.

Force Commander Major General Alberto Asarta Cuevas, who met Lebanese top officials on Monday, said his troops would not be intimidated by terrorist incidents.

"UNIFIL peacekeepers remain determined more than ever to pursue their mandated tasks with greater determination," Asarta said, "we will not allow this incident to interrupt our operations on the ground which are continuing in cooperation with the (Lebanese Army) ."

A four-truck convoy belonging to UNIFIL's Italian contingent was targeted by a roadside bomb Friday afternoon on the highway leading to the southern coastal city of Sidon.

Six peacekeepers and two Lebanese civilians were injured by the blast and the Lebanese judiciary has ordered an investigation into the blast.

Israel:

One of Israel's wealthiest families has kicked up a furor for doing something the country's leaders have campaigned against for years: trading with Iran.

The Ofer Brothers Group is now facing a widespread public backlash, fueled not only by its alleged dealings with Israel's fiercest foe but also by popular sentiment against the fabulously rich and new friction between Israel and the U.S. over the affair.

"I think this is very serious. We preach to the world to impose sanctions on Iran, and it turns out that an Israeli company might be involved in dealing with them," said Nachman Shai, a lawmaker with the opposition Kadima Party.

He said it would be critical to find out what the government knew, wondering whether other Israeli companies have illicit dealings with Iran. "I have lots of questions and no answers," he said.

The scandal has entangled a family that many Israelis love to hate because of the vastness of its holdings in the heavily centralized Israeli economy.

Octogenarian brothers Sammy and Yuli Ofer own Zim Integrated Shipping Services, one of the world's biggest container shipping companies, and control The Israel Corp., Israel's largest holding company, with assets in shipping, chemicals, energy and transportation. They also have holdings in real estate and banking.

This year Forbes magazine estimated their fortune at $10.3 billion, ranking them among the world's wealthiest men and putting them among Israel's most generous and high-profile philanthropists.

Last week, their reputation took a major hit when the Ofer Brothers were among seven foreign companies sanctioned by the U.S. for doing business with Iran that helps fund its nuclear program.

The Ofers were accused of selling an oil tanker to Iran through a Singapore subsidiary.

The brothers have not commented publicly on the matter.

Through a spokesman, they have said the $8.5 million deal, small for the massive conglomerate, was conducted unwittingly with an Iranian shell company. Nonetheless, the company said it was embarrassed.

Such explanations have done little to calm the uproar.

Israeli leaders repeatedly have identified Iran to be the greatest threat to Israel.

Israel, like most of the international community, believes Iran is developing nuclear weapons, despite its denials and its concerns have been heightened by Iranian calls for Israel's destruction and Tehran's support for anti-Israel militant groups.

The sale of the ship could violate Israeli law as well, under legislation barring ties with an enemy state. The Ofers may also have run afoul of this same law by transporting Iranian oil — an activity not outlawed in the U.S.

Prime Minister Benjamin Netanyahu denied the family's claims that the government authorized its activities.

"The prime minister's office did not authorize these contacts," a Netanyahu associate cited the prime minister as telling parliament's foreign affairs and defense committee on Monday. "They were not authorized to go (to Iran) or to deliver cargo to Iran. We have a clear-cut policy on this matter."

The associate spoke on condition of anonymity because the meeting was closed.

Calls for a criminal investigation into the Ofers' dealings with Iran are mounting, and the attorney general's office said it was considering a probe.

"The attorney general undoubtedly has to order a criminal investigation because we are talking about a grave criminal offence," Israel Radio's legal affairs analyst, Moshe Negbi, said on Tuesday. "We have a law that explicitly forbids trade with the enemy, carrying a penalty of (up to) seven years' imprisonment."

The recently retired head of the Mossad, Meir Dagan, said this week that the case had been blown out of proportion. Israeli defense officials said a joint investigation with the U.S. concluded the Ofers had not committed any security offences.

A TV report Tuesday hinted that the Ofers have worked with Israeli security in the past. It cited anonymous defense officials but gave no evidence.

The U.S. sanctions, which ban the Ofer Brothers and their Singapore subsidiary from obtaining U.S. export licenses and American bank loans topping $10 million, came at an embarrassing time.

Netanyahu was in the U.S., winding up a strained visit to Washington in which he publicly differed with President Barack Obama over Mideast peacemaking. Throughout his visit, Netanyahu repeatedly voiced concerns about the Iranian nuclear program.

The affair, known as "Ofergate" in the Israeli media, is the latest public relations fiasco for the family. Critics have long charged they were allowed to buy up privatized government assets, including the Zim shipping company, on the cheap. The family's chemical and energy businesses have also been accused of polluting the environment and playing a significant role in the alarming shrinking of the fabled Dead Sea.

Several years ago, the Ofers took a beating in the media after Sammy Ofer, an art collector, withdrew a planned $20 million donation to the Tel Aviv Museum of Art after other donors objected to naming the museum for him and his wife.

The shipping magnate later gave large donations to an Israeli hospital around the corner from the museum and to Britain's national maritime museum.

Some critics saw a pernicious sign of the Ofers' influence when major television channels refused to broadcast a documentary film about the connection between big money and government in Israel that focused on the family.

Eventually the film was broadcast on state TV after the station agreed to show a filmed response produced by the Ofers.