Abbas discusses recent developments with Sultan Qaboos of Oman, calls for constitution panel to meet

Abbas: No just comprehensive peace before prisoners are released

Moussa says Arab League ready to host meeting for reconciliation among Palestinian factions

Israel raids Palestinian villages, threatens Gaza if Palestinian state declared

Netanyahu succumbs to settlers’ demands to appoint “religiously observant” chief of secret service

Palestinian President Mahoud Abbas and Sultan Qaboos bin Said of Oman exchanged views during a phone call on the recent Arab and international developments as well as means to boost relations between the two sides.

Abbas also received a phone call from Jonas Gahr Støre and reviewed recent developments in the region with him.

Meanwhile, Abbas last week said peace cannot be reached without Israel releasing all Palestinian prisoners.

"The Palestinian leadership will spare no efforts to free all prisoners and detainees in the Israeli occupation's prisons," Abbas said when receiving a Palestinian activist against the Jewish settlement, who was freed last week.

Israel holds some 7,000 Palestinians in 25 jails and detention facilities.

In Gaza, the Hamas movement, rival of Abbas' Fatah party, holds an Israeli soldier hostage since June 2006. The Islamic movement says it wants to exchange Gilad Shalit for more than 1,000 prisoners.

He said in a meeting with the coordinator of the popular committee against the wall Abdullah Abu Rahmeh that the Palestinian Authority considers the prisoners’ issue a top priority, and that it will spare no effort to release all prisoners and detainees from Israel’s prisons.

Abu Rahmeh delivered greetings and support from prisoners for Abbas’ initiative to end the division. Abu Rahmeh, a nonviolent activist in the West Bank, completed two weeks ago a year-long sentence for 'incitement' against Israel.

The Arab League is willing to host Palestinian reconciliation talks, Secretary General Amr Moussa said after a meeting with Hamas leader Mahmoud Zahar in Cairo.

"The Arab League is willing to host any Palestinian meetings to push forward national reconciliation efforts," Moussa told reporters.

"There is no justification whatsoever for the continued Palestinian division," he said, stressing the need to "unify Palestinian ranks ahead the current challenges."

Officials from Abbas's Fatah movement and its rival Islamist group Hamas held talks in a bid to restart reconciliation talks.

The two have been at loggerheads since 2007 when Hamas took control of the Gaza Strip, routing Abbas loyalists.

In Cairo, Zahar said that another meeting would be held in Gaza "in the coming two days" with Fatah members.

Egypt has in the past hosted several rounds of Palestinian reconciliation talks but with no success.

Egypt "does not want to sponsor talks that would end in failure and we understand that," Zahar said.

The Arab League will therefore "host the talks for a defined time period until an agreement is reached, which will be announced in Cairo", Zahar said.

Gaza has been effectively cut off from the West Bank, which is under the control of Fatah, and repeated attempts at reconciliation have led nowhere.

The disunity of the Palestinians has prevented them from taking a common stance in peace talks with Israel, which are now off the table.

Tens of thousands of Palestinians took to the streets of Gaza and the West Bank last week to demand that the two factions end their long-running rivalry.

Israel hunted for the perpetrators of a grisly murder of a family of five in a remote West Bank settlement, appealing for help from the Palestinian Authority, which sent security forces to join the manhunt.

The knife attack, which killed two young children, a baby and their parents as they slept, was the deadliest in years. It comes at a delicate moment, with pressure building on Israel to launch a new peace initiative and the Palestinians pushing for world recognition of an independent state — with or without a peace deal.

Israeli forces set up checkpoints throughout the area surrounding the Itamar settlement in the northern West Bank and were still sweeping the region. Military officials said they had made some arrests, but wouldn't provide details.

The governor of the nearby Palestinian city of Nablus, Jibril Bakri, told The Associated Press that Palestinian security forces were also searching for suspects. It was a rare instance of the two sides both searching for militant suspects, though Israeli forces and those of the Western-backed Palestinian Authority in the West Bank do co-operate on security issues.

Israeli Prime Minister Benjamin Netanyahu convened a special security meeting to decide upon further action, saying he was "deeply shocked" by the attack.

"We all know, as those who want to strike at us will know, that the future of the settlements will not be decided upon by terror," he said. "Israel will not stand by idly after such a despicable murder and will act vigorously to safeguard the lives of the citizens of Israel and punish the murderers."

The Al Aqsa Martyrs' Brigades, a mostly defunct Palestinian militant group, took responsibility for the attack. However, they frequently claim to be behind attacks they didn't do in hopes of raising their profile.

"Violence does not justify violence, we condemn it completely, whoever does it and whoever the victims are," Palestinian Prime Minister Salam Fayyad told The Associated Press. Abbas called Netanyahu to condemn the attack as well.

Netanyahu said that was not enough and demanded Palestinians stop incitement "that is going on every day in their schools, in their mosques, in the media outlets they control."

"It is time to stop this double speak, because the Palestinian Authority speaks peace outwards but allows incitement inwards," he said in a speech.

In Gaza, a Hamas official applauded the attack and local residents celebrated the killing of the settlers.

TV footage from the scene showed children's toys covered in blood and furniture tipped over. Israeli officials said at least one Palestinian militant infiltrated the settlement, entered the family home and stabbed the parents and three of their children, ages 11, 3 and 4 months, as they slept.

Two young children asleep in another part of the house survived. Another family member, a 12-year-old girl, was away at a youth group function when the attack occurred. She arrived home to discover the carnage and then alerted authorities.

Israeli President Shimon Peres called the attack "one of the ugliest we have known."

"The murder of parents and their little children ... indicates a loss of humanity," he said. "No religion and no faith in the world condones such atrocious acts."

The bloody nature of the attack immediately raised concerns about Jewish retribution. Col. Nimrod Aloni, a West Bank brigade commander, said the military was preparing for possible clashes between Palestinians and settlers.

Israeli settlers sometimes carry out revenge attacks on Palestinian targets, either in retaliation for Palestinian violence or for Israeli government actions against settlers. The attacks, known as "price tag" diplomacy, include vandalism, destruction of crops or physical attacks.

Netanyahu called on all Israelis "to act with restraint and not to take the law into their own hands."

Itamar is a small and extreme settlement that has rocky relations with the nearby Palestinian towns and villages.

The overnight attack was the first against settlers in months and the deadliest in years, marking a rare outburst of violence during a relatively calm period. It comes as Israeli-Palestinian peace efforts are at a standstill and could complicate efforts to restart them.

Peace talks between the two sides collapsed last year over disputes over Israeli settlements in the West Bank, territory Palestinians envision as part of their future state.

A 10-month Israeli freeze of new settlement construction expired last September, but a de facto slowdown has since continued on the ground, angering settlers.

Ron Nahman, mayor of the Ariel settlement, called on the government to respond to the "massacre" by resuming construction in earnest. He said anything else would send a message to Arabs that "you can do anything against the settlers."

The attack occurred on the Jewish Sabbath when the observant are prohibited from working and most physical activity, instead spending the day in prayer or rest. Itamar is an observant community and there was no official comment from residents there.

The White House condemned the attack and offering condolences to the Israeli people.

"There is no possible justification for the killing of parents and children in their home. We call on the Palestinian Authority to unequivocally condemn this terrorist attack and for the perpetrators of this heinous crime to be held accountable."

Israeli Foreign Minister Avigdor Lieberman said he would file a complaint with the U.N. over the attack and that he expects "worldwide condemnation of the satanic murder of an entire family."

The U.N. Special Coordinator for the Middle East Peace Process, Robert Serry issued a statement in which condemned the "shocking murder" and called for those responsible to be brought to justice.

On the other hand, Israeli officials warned that the unilateral recognition of a Palestinian state by the United Nations violates the Oslo Accords and could lead to violence.

Such a move will encourage the Palestinians to forgo negotiations with Israel and move toward recognition of statehood, Israeli diplomats told Haaretz.

Israel informed 15 members of the United Nations Security Council and European countries if the U.N. agrees to recognize a Palestinian state within the 1967 borders at a General Assembly session in September, Israel will respond with a series of unilateral steps of its own, the newspaper reported.

Rafael Barak, the Foreign Ministry's director general, recently sent a classified cable to more than 30 Israeli embassies, directing them to lodge protests at the highest possible level in response to the Palestinian Authority's effort, the paper said.

Sources in the Foreign Ministry said while a formal response to such a move has not been formally discussed by Netanyahu and his cabinet, a number of ideas have been articulated, including the possibility of applying Israeli law to the West Bank or annexing major settlement blocs to Israel, the paper said.

Meanwhile, Netanyahu has appointed Yoram Cohen to succeed Yuval Diskin as head of the Israel Security Agency (ISA), also known as the Shin Bet, when Diskin ends his six year term in May.

The appointment was the latest in an intense six month period in Israel that saw a new chief of staff for the Israeli Defense Forces, a new director for the Mossad overseas intelligence services, a new head of Military Intelligence, a new chief of police and a new director of the National Security Council.

In his announcement, Netanyahu described the new ISA chief Cohen as "someone who has been in the field."

"He has grown from it and knows it," the prime minister said, adding that "I am convinced he is also familiar with the challenges we face. I am convinced he possesses the abilities, the experience and the leadership necessary to meet these challenges."

Cohen served as Diskin's deputy from 2006 to 2008, after serving in a variety of posts within the secretive agency, including head of the department charged with preventing Arab and Iranian espionage in Israel. In 2008, he moved to Washington, D.C. where he was a research fellow at the Washington Institute for Near East Policy.

Cohen, who was born in Tel Aviv, has been with the Shin Bet for more than 30 years, and, like so many others in Israel's senior military echelon, served in one of the Israeli army's elite units during his mandatory service: the Golani infantry reconnaissance unit.

He joined the Shin Bet as a security guard in the West Bank, from there he went on to take the organization's Arabic language instructional course before becoming a coordinator in the Ramallah district.

Cohen spent most of his career in operations in Ramallah, Jerusalem, and the southern West Bank, the Israeli newspaper Ha' aretz reported.

Diskin praised the appointment, noting in a statement that Cohen's "wealth of experience combined with his personal and professional abilities will enable him to lead the service successfully through the challenges of the present and the future. "

Meir Elran, director of the Homeland Security Program at the Institute for National Security Studies at Tel Aviv University, told Xinhua that Cohen will have three main areas to deal with: the Palestinians, counter-terrorism, and subversion by Israeli Jews against the state.

"The most important thing, as always, will be his engagement in what we term counter-terrorism," Elran said. "The main issues will be to see to it that the situation in the West Bank stays the way it is presently. The other issue is Hamas in the Gaza Strip."

Cohen, according to Elran, will also be busy with counter- espionage duties, as well as what is referred to as "the Jewish division" which focuses on prevention of subversive activity from Israeli Jews, both against the state and towards minority group such as Arab Israelis.

Some Israeli newspapers in their coverage of the appointment pointed out that the Cohen is religiously observant. Elran, however, argues that it was a non-issue and that one can't predict what a person's policy will be based on the fact that he wears a skullcap.

The Jerusalem Post's Defense Correspondent Ya'akov Katz wrote, following the appointment, that despite his years of experience Cohen will face some major challenges.

Katz believes that, regarding the Palestinians, there is some concerns within the defense establishment that the army and the Shin Bet have lost some of their previous advantages due to the dramatic drop in military activity in the West Bank.

Without having "boots on the ground" inside almost every West Bank city, it is argued that the army and the Shin Bet have difficulty gathering information like they were able to during the second intifada, when arrest raids took place on a daily basis, he added.

Amir Oren, a senior correspondent for Ha'aretz, who the day prior to the appointment of Cohen wrote an article supporting another candidate for the post, wrote following the announcement that "although it's not clear at the Shin Bet how Netanyahu picked Cohen to head the agency, advocates of Cohen will point to his familiarity with the Iranian threat, a key issue on Netanyahu's plate."

He added that "for three years, (Cohen) was out of the Shin Bet and after that coordinated specific areas of responsibility, rather than the broad sweep of the agency's work. He will have a lot of material to digest in his new job."

Elran maintains that, when it comes to Iran, the Shin Bet will only be involved in regular counter-espionage activities and that overseas operations are the territory of the Mossad.

Israel has long seen Iran as one of its major security threats, accusing Iran of secretly developing nuclear weapons under civilian disguise, which has been denied by Tehran.