Israel, Egypt plot Gaza's future
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Israeli and Egyptian leaders discuss the Gaza withdrawal plan as doubts mount over the survival of Israel's government.
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GAZA-EGYPT BORDER  - From a watchtower on the  Israeli army's line in the sand, the hottest spot in the  4-year-old Palestinian revolt looks eerily calm for a moment.
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In the boldest sign of a thaw following the death of Yasser Arafat, Egypt will collaborate with Israel in new industrial zones and may soon return its ambassador to Israel.
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A Hamas military victory in Gaza would create a two-headed Palestine &#151; with the Islamic extremists in control in the coastal strip and Western-backed Fatah ruling the West Bank.
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Abbas dissolves the government, but  Hamas now controls Gaza. For Israel, the choice is between trying to reverse that reality, or dealing  with the Islamists
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RAFAH, Gaza Strip  - Hamas on Wednesday demanded a central role in controlling the Gaza Strip's border with Egypt in an open challenge to Palestinian President Mahmoud Abbas ahead of crisis talks in Cairo.
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Israel has agreed to let Egypt step up its military presence along its border with the Gaza Strip ahead of an Israeli withdrawal from the Palestinian territory set for next year.
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In a series of dramatic steps capped Sunday by a high-profile prisoner swap, Israel and Egypt are moving rapidly to improve relations, seizing the opportunity for a Middle East peace deal presented by Yasser Arafat's death.
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Israeli and Palestinian officials are  trying to work out a deal to end Israel's biggest Gaza  offensive in four years of conflict in return for stopping  rocket fire into the Jewish state, security sources said.
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Israel's security cabinet met on Wednesday to consider stepping up military assaults in Gaza to counter a wave of Palestinian rocket attacks that have killed two Israelis in the past week.
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Hamas leader Khaled Mashaal, who's kept a low profile since last month's twin suicide bombing in southern Israel, made a surprise visit to Egypt on Sunday, holding talks with Egypt's intelligence chief about an anticipated Israeli withdrawal from the Gaza Strip.
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Hamas agreed on Saturday to  Egyptian calls to control the flow of Palestinians through the  breached Gaza border and expects Egypt to seal remaining gaps  in the frontier wall, a Hamas official said.
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The move suggests the sides were seeking to pull back from a potential showdown in the Gaza Strip, at least for now.
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Israel sought on Monday to shore up European support for a U.S.-backed strategy of isolating Hamas in Gaza while freeing funds for President Mahmoud Abbas's emergency cabinet in the occupied West Bank.
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Israeli and Palestinian security officials planned to meet late Wednesday to discuss ways of stopping Palestinian rocket fire in the northern Gaza Strip, Israeli officials said.
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Israel and the Palestinian Authority  are trying to work out a deal to end the army's Gaza offensive  in return for stopping militants firing rockets into the Jewish  state, Israeli security sources said Tuesday.
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Palestinians and Israelis have agreed in principle to proposals aiming to end their conflict, Egypt's official news agency MENA said Tuesday.