Ehud Olmert formally resigns as Israeli Prime Minister (1). Israeli President Shimon Peres is expected to ask Foreign Minister Tzipi Livni, winner of the recent Kadima party elections, to form a new coalition government (4). A commentary in The Times of London discusses the importance of Israel?s continued work towards a peace deal despite distractions (2). A Fatah official states that a military option against Hamas is a possibility (5), resulting in a strong reaction by Hamas leadership (9). Palestinian company PADICO announces a massive investment plan for the West Bank (6).

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