Israel

Israel and the Lebanese Shi'ite militant group Hezbollah carried out a prisoner exchange Wednesday - swapping five Lebanese prisoners for the bodies of two Israeli soldiers.

Two years after they were abducted in a cross-border raid by Hezbollah guerillas, the remains of Israeli soldiers Ehud Goldwasser and Eldad Regev were brought to the Israeli border in plain black coffins.

Israel is using Iraqi air space and U.S. bases in Iraq to prepare for a strike against Iran, according to an Iraqi news report.

The report, which was cited by Iranian media, quoted sources in the Iraqi defense ministry. The sources reportedly said that using U.S. bases in Iraq would enable Israeli planes to reach Iranian targets within minutes.

Israel carried out a major military exercise earlier this month that American officials say appeared to be a rehearsal for a potential bombing attack on Iran’s nuclear facilities, the New York Times reported on Friday, as more than 100 Israeli jets participated in the maneuvers, which were carried out over the eastern Mediterranean and Greece during the first week of June.

"If Iran continues with its program for developing nuclear weapons, we will attack it. The sanctions are ineffective," Transport Minister Shaul Mofaz told the mass-circulation Yedioth Ahronoth newspaper. "Attacking Iran, in order to stop its nuclear plans, will be unavoidable," said the former army chief who has also been defense minister.

It was the most explicit threat yet against Iran from a member of Olmert's government, which, like the Bush administration, has preferred to hint at force as a last resort should U.N. Security Council sanctions be deemed a dead end.

Iran says Israel should return the disputed Golan Heights to Syria unconditionally.

Iranian Foreign Minister Manouchehr Mottaki says Israel is in no position to set conditions on the return of the Golan Heights. Israel captured the strategic plateau from Syria during the 1967 Six-Day war.

Mottaki also called for Israel to pull out of the Palestinian territories.

Iran on Friday accused the US and the Israeli occupying regime of fueling the deadly sectarian fighting in Lebanon between the Shiite resistance movement Hezbollah and the rivals loyal to government.

"Adventurous efforts and interventions by the US and the Zionist regime are the main cause of the continuous chaotic situation in Lebanon," Foreign Ministry Spokesman Mohammad Ali Hosseini said.

"Unfortunately, part of the political plot which was predicted ... has been executed," said Hosseini, who was quoted by ISNA and Fars news agencies.

Israel's President Moshe Katsav has agreed a plea bargain to avoid rape charges and a prison term, the country's attorney general has said.

Mr Katsav had been facing allegations of rape and sexual harassment against women who worked for him.
He is now expected to get a suspended sentence for sexual harassment and be asked to pay damages to his accusers.
Mr Katsav's current term ends in July but he will now resign immediately, to be succeeded by Shimon Peres.
Mr Peres was elected earlier this month to be the next president, a largely ceremonial position.

Israel to free 250 Palestinian prisoners

The Israeli Air Force (IAF) has been training on long-range flights, including refueling in mid-flight, in preparation for potential strikes against Iranian nuclear targets.

The training program has been taking place for some time but has only been released for publication Friday, the Ma'ariv daily reported.

Intelligence assessments received by the defense establishment concur that once Iran passes the point of no return in its nuclear efforts, the entire Middle East will enter a frantic nuclear armament race. Egypt and Saudi Arabia are expected to take the lead should such a scenario become reality.

GAZA (Reuters) - Israel attacked Islamist fighters in Gaza on Wednesday for the first time since Hamas seized the territory, and ended an embargo of the Palestinian Authority by opening contacts with a new government in the occupied West Bank.