Prime Minister Sharon's announcement that the Ma'ale Adimim settlement will be increased by an additional 3500 houses in order to connect the settlement with Jerusalem has sparked serious and negative reaction from the Palestinians and the international community. This announcement has serious implications for the two-state solution and thus the Road Map, as the addition of the 3500 houses entrenches Israeli control on Jerusalem and amounts to taking of a large percentage of the West Bank.

Palestinians remain worried that Prime Minister Sharon wants to quit impoverished Gaza only to annex areas around more populous West Bank settlement blocs. Some 8,500 settlers live alongside 1.3 million Palestinians in Gaza compared to 230,000 settlers and 2.3 million Palestinians in the West Bank. It has been remarked that Prime Minister Sharon brought both issues to the Cabinet to neutralise international criticism of the barrier route by coupling it with a decision to uproot settlements.

During Prime Minister Sharon’s recent visit to the United States, President George Bush warned Israel that there could be "no expansion" of settlements in Palestinian territories under the US-backed Middle East Road Map. He said "our position is very clear, that the Road Map is important, and the Road Map calls for no expansion of the settlements".

President Abbas welcomed the comments of President Bush in which he confirmed the U.S' commitment to the Road Map and appealed to Israel to totally halt its settlement activity in the West Bank.

Israel acknowledged it has differences with the US over the expansion of West Bank settlements. Justice Minister Tzipi Livni said Israel was sticking to a plan to add 3,500 new homes to the settlement of Ma’ale Adumim. Livni said that Israel and the United States agreed on the continued construction of homes within the built-up areas of the settlements, i.e. within the existing perimeters of the settlements.

Prime Minister Ariel Sharon confirmed there will be a delay in plans to pull troops and settlers out of the occupied Gaza Strip. The withdrawal will not take place until mid-August to avoid clashing with the traditional Jewish mourning period of Tisha Be Av.

Prime Minister Sharon said that Israel's withdrawal from settlements in Gaza would improve Israeli security and enable Israel to strengthen its hold over major West Bank settlement blocs.

Following the announcement by HAMAS that they intend to run for local government elections, there is a sense of optimism amongst politicians and political analysts, that HAMAS is ready to be integrated into the Palestinian main stream political system. What is not exactly known is the weight and influence this would have on the current direction of the Palestinian political set-up. Analysts are raising different views on the inclusion of HAMAS and the envisaged price for their inclusion.

Israeli analysts say that the inclusion of HAMAS into Palestinian main stream politics would have far-reaching ramifications for the way Israel looks at and addresses political dialogue with the Palestinians. Particularly because HAMAS has been defined as a terrorist organization by Israel and HAMAS has been very reluctant to accept Israel’s right to exist.

Dr Mahdi Abdul Hadi head of Passia, a Palestinian NGO, feels that this is a positive move by HAMAS and should be encouraged. Dr Mahdi is of the opinion that regardless of the Israeli views and definitions of the HAMAS organization, this is 'a Coalition in the making' as he calls it, and he thinks it is a significant step in uniting the Palestinians.

Dr Mahdi calls it a historic transformation, as HAMAS transforms from a popular movement based on armed struggle and opposition to the established Palestinian 'order', to a more progressive moderate group. HAMAS has managed to firmly place itself within the Palestinian political order in a bid to confirm its position, power and legitimacy both inside Palestinian society and to a lesser extent outside.

One of the main questions regarding HAMAS's entry into the PLO house is whether or not this will be accompanied or followed by the development of a Palestinian strategy across factional lines.

Following municipal elections this week, President Mahmoud Abbas' Fatah movement came out ahead in Palestinian local elections but HAMAS won key urban centres in a show of strength. The solid performance by HAMAS suggests it could mount a serious challenge to Fatah in parliamentary and legislative elections set for this summer. Fatah has been damaged by allegations of corruption and misrule while HAMAS has gained popularity from its central role fighting Israel, its religious piety and charitable work, filling gaps left by the Fatah-run Palestinian Authority. HAMAS reportedly won 34 councils in all.

The United States has reportedly sent a letter to the leadership of Hizballah and HAMAS. In the letter, the US government expresses its respect for the organisations’ broad popular support, which they admit, is expected to grow with the upcoming elections in Lebanon and Palestine. The letter also serves to invite the respective leaderships of Hizballah and HAMAS to a meeting with senior US officials at "a still undecided location".

The Sharm El Sheikh Summit, which took place on 8 February 2005, marked the highest-level meeting between Israeli and Palestinian leaders in years. One definite result that emerged from the summit was a joint cease-fire agreement that was reached between Israel and Palestine under the supervision and joint efforts of Jordan and Egypt, both of which immediately announced the reinstatement of their Ambassadors to Tel Aviv.

Prime Minister Ariel Sharon said, "we agreed that all Palestinians will stop all acts of violence against all Israelis everywhere, and, at the same time, Israel will cease all its military activity against all Palestinians everywhere. We have an opportunity to turn our back on the bloody path imposed on us over the last four years". Sharon expressed his intention to respect the right of Palestinians to have a "decent and independent life" saying the Jewish State has no wish to control them. But he warned that the opportunity at hand "was fragile" and cautioned them against "extremists waiting to derail the process".

It would appear that a new spirit has emerged which bodes well for the region. Israel will soon start transferring security control for a number of Palestinian cities to PNA control. This would be the first time in the history of the Israeli-Palestinian conflict that Israel agrees to form a joint committee assigned with discussing the special criteria for releasing prisoners as well as pledging to halt all military actions against Palestinians regardless of whether they are HAMAS or Fatah.

The fact that Jordan and Egypt would be reinstating their Ambassadors in Tel Aviv gives further impetus to the new movement towards peace. However, no one can disregard the concerns of the Palestinians and the Israelis, particularly as so many attempts at arriving at a truce have been no more than short-lived stopgap measures.

Three months following the Sharm el Sheikh Summit, President Abbas has taken some concrete steps to fulfil his pledges made at the summit. Not only has President Abbas been active in collecting illegal weapons, but he has also restructured the PA security forces into three groups, all subordinate to the Interior Minister, Mr Nasser Yousef, a move that has been long called for by Israel and the international community. This while Prime Minister Sharon has been stalling in carrying through with the withdrawal from key West Bank cities and the release of political prisoners as pledged at Sharm el Sheikh.

Israel’s continued construction of the separation wall runs contrary to the will of the international community as reflected in UN General Assembly Resolution A/ES-10/L.10 of 21 October 2003. The South African Government does not believe the construction of the so-called security wall represents a legitimate security measure. The Wall, twice the length of the Green Line, will effectively become a de facto border, thereby annexing approximately 48 percent of the West Bank, including the Jordan Valley.

South Africa’s presentation of a written legal position, as well as our participation in the proceedings before the International Court of Justice (ICJ) in The Hague on 23 February 2004 is a logical consequence of our principled position in respect of the Israeli-Palestinian conflict, namely that all efforts to resolve this matter through negotiations must be supported.

On 9 July 2004 the International Court of Justice (ICJ) made the findings as indicated below.

• Jurisdiction

The Court found 14 to 1 that it had jurisdiction to hear the matter.

• Arguments of Substance

1. The Court found 14 to 1 that the construction of the Wall is contrary to international law.
2. The Court found 14 to 1 that Israel should dismantle the Wall and render it ineffective.
3. The Court decided 14 to 1 that Israel should pay reparation and restitution. In all of the above the dissenting judge was judge Buergenthal (USA).
4. The Court further found 13 to 2 that all states parties to the Geneva Conventions on International Humanitarian Law should not recognise any results of the Wall and not give any aid and assistance to Israel in this regard. (Judges Buergenthal (USA) and Kooijmans (The Netherlands) dissenting)
5. The Court further found 14 to 1 that the United Nations General Assembly and Security Council should consider what action is required on the basis of the finding. Judge Buergenthal dissenting.

The most formidable challenge facing President Abbas is controlling the militants. The success of the declared cease-fire depends, from the Palestinian side, on President Abbas’ ability to convince the militants to halt attacks and allow him to negotiate an end to the Israeli occupation. The militants have indicated that they will not give up their weapons until the occupation ends and there is an independent Palestinian state. The militants have indicated that if there are no visible signs of a commitment to stop targeting Palestinian militants from the Israeli side, they reserve the right to retaliate.

However, it is important to note that the great majority of Palestinians are desperately weary of the years of violence and the economic collapse that has resulted and the militants are aware of this. By deciding to hold back and refusing to commit to the formal cease-fire, HAMAS has bought itself time to judge Israel by its actions. Analysts believe that by refusing to go along with President Abbas' formally declared cease-fire, HAMAS is playing for advantage in the Palestinian political arena. In their view this is only a manoeuvre; a tactic to see how much it can extract from Mahmoud Abbas in terms of internal concessions.

Analysts state that should President Abbas be unable to assert his authority and the situation worsens, the whole process will be back to square one and there would be no movement on the peace process. They affirm that should Mr Abbas be able to deliver an end to terror and succeed in reforming the PNA, he would have the full support of the international community and there would be increased pressure on Sharon’s Government to move ahead to permanent status issues.

Despite the prevailing scepticism that President Abbas might not be able to control the militants, he has positively influenced the behaviour of HAMAS and Islamic Jihad. Both groups have agreed to be part of the July legislative elections, and HAMAS may be recognised as a political party soon.

President Abbas' disposition is calm and strikes as firm. He talks peace to the Palestinians and the rest of the world alike. President Abbas in most of his speeches and interviews reiterates the Palestinian fundamental demands, which may not be compromised. This constantly serves to remind the Palestinians that he has not given in, and does not intend to give in, on Palestinian fundamental issues in all the changes he is facing.

The new Palestinian leadership is committed to charting a new path in its quest for self-determination, and the support it enjoys from regional players whose roles had previously been negligible is a positive development. In this regard, the Israeli government's commitment to start with its disengagement plan in Gaza is one of the reasons for optimism.

The decision to pull out of Gaza does not mean that Prime Minster Sharon has a changed view of Israel's neighbours. It is rather a realisation that Israel has more to gain by pulling out of Gaza and seizing the moment to create the necessary environment for future stability. Israel's strategic goal is the maintenance of a democratic Jewish State. Prime Minister Sharon has realised that if the occupation continues indefinitely, then there is a threat to that democratic Jewish State by the very fact that the discourse could change into a demand for a bi-national state. To avoid such an eventuality, he has chosen to move out of Gaza and part of the West Bank to create a smaller Israel not occupying large parts of the Palestinian land.

Political analysts add that while he is not likely to move beyond his current proposals, if the Palestinians do manage to stop the violence and prove themselves real partners, Prime Minister Sharon could come under intense pressure from the Israeli public and the international community to move the process further.

It is foreseen that a follow-up meeting to the 2002 "Spier Initiative" would be held during the course of 2005. Separate visits from various Palestinian movements as well as Israeli political parties are also scheduled to take place to South Africa during 2005. Of further significance is the proposed visit to South Africa by the newly elected President of the PNA, Mr Mahmoud Abbas. These planned visits and initiatives, such as Spier, are a clear illustration of South Africa’s commitment in contributing to finding a lasting peace settlement in the Middle East.

South Africa’s clear position of support for the establishment of a viable Palestinian State is based on its firm belief that only a realistic two-state solution can bring lasting peace to the Middle East. There is an understanding that the question of South Africa’s perceived bias against Israel has to be addressed if South Africa wishes to play a meaningful role in the Peace Process, above all if South Africa wants to be accepted as an independent honest broker by both parties. In as far as South Africa’s role is concerned, South Africa supports the process and not one or another of the parties to the conflict. South Africa’s involvement in the Middle East Peace Process is based on universally recognised ethical values and not on the promotion of self-interest.

Politically, South Africa's contribution to the Middle East Peace Process has increased its profile in the region and earned it enhanced respect. This must be complemented with an enhanced and revitalised economic strategy and initiative. The potential for trade and investment remains significant and has yet to be pursued to the fullest extent.

• The elections in Iraq, held on 30 January 2005, have been hailed as a success, relative to the current situation, by world leaders and political commentators. Both supporters and opponents of the war saw the elections as a key step towards restoring Iraqi sovereignty.

• As was predicted, most of Iraq’s Sunni community rejected the elections, as large numbers of Sunni’s did not participate after Sunni clerics asked them to boycott the elections.

• A Transitional Government will appoint a committee to draft a new constitution. A referendum will be held, possibly in October 2005, to adopt the constitution. Elections for a permanent government will be scheduled thereafter, possibly in December 2005.

• South Africa’s hope is to see the restoration of peace in Iraq and the return of full sovereignty to its people.

• South Africa would therefore continue to monitor developments in Iraq with a view to foster closer political ties and broader economic relations with a post-war sovereign Iraq, especially following the December 2005 elections.

• In view of the above, it is foreseen that South Africa might, when circumstances permit, consider sending a fact-finding mission to Iraq with a view to opening a diplomatic Mission in the event that Iraq stabilises.

• There is a strong Shia majority in the Transitional National Assembly. The new president, Jalal Talabani, is Kurdish with one Shia and one Sunni vice president.

• Nearly three months after Iraqi elections, Iraq's elected assembly has finally formed a government, also approving the list of Cabinet Ministers. Ibrahim Al–Jafaari has been appointed as the new Iraqi Prime Minister, with one Shiite and one Kurd as Deputy Prime Ministers. Two Deputy Prime Minister positions remaining vacant.

• Both the government and the Cabinet’s ethnic shape reflect the strong Shiite and Kurdish result of the January 30 elections. The divide between the Shiite and Sunnis remains a stumbling bloc to the smooth transition of power to the new government. Sunnis fill four Cabinet positions, even though most Sunni voters boycotted the elections. It is argued that not enough key positions went to Sunnis, however.

• There has been a new wave of attacks in Iraq since the swearing of the Prime Minister, and the approval of the Cabinet.

• The world welcomed news of the formation of the new government and Cabinet – which was criticised for taking too long. US Secretary of State, Condoleezza Rice, personally called all members of the new Cabinet. At the same time, Iraq is trying to repair its somewhat strained relations with Jordan. In a move towards this end, President Talabani has accepted an invitation to meet with King Abdullah in May 2005. High on the agenda for the two-day visit is said to be the development of a mechanism of cooperation between the two countries.

• A veteran South African constitutional expert, Nicholas Fink Haysom, has been designated by the United Nations to assist the Iraqis with the writing of their new constitution in anticipating a request for assistance.

• The Foreign Minister of Iran, Kamal Kharrazi, paid an historic visit to Iraq on 17 May 2005. The visit was the first by a senior official from a neighbour country since Iraq’s new Government was sworn in earlier in May 2005, and also the first by an Iranian Government Minister in recent years.