News stories by Analysis by Jerrold Kessel, page 8

Israel's outgoing prime minister Ehud Olmert is risking a crisis of confidence with Egypt by insisting that a prisoner exchange between Israel and Hamas precede any Egyptian-mediated ceasefire arrangement to end the Gaza war.

An indiscreet whisper following a hastily scribbled note around the Israeli cabinet table exposed the deepening political stand-off in the wake of last week's inconclusive elections.

Who wins a tie? That was U.S. President Barack Obama's dilemma Wednesday on whom to congratulate as the winner of Israel's general election.

Israel's foreign minister Tzipi Livni clung precariously to a narrow lead over her right-wing rival Benjamin Netanyahu as vote counting neared conclusion from Israel's Tuesday general election. Both would-be prime ministers continue to claim victory: 'I won,' read the headline of the country's biggest newspaper, Yedioth Ahronot, alongside the photos of the two.

Israeli voters went into their polling booths Tuesday uncertain about the government they wanted to lead them over the next four years, only to emerge from their vote even more uncertain about their country's future.

Along the ironic lines of 'Something Funny Happened on the Way to the Forum', the old Broadway musical about democracy in ancient times, something 'funny' happened to Israelis on their way to the polling stations.

And then there were four.

Just over a week before they go to the polls, Israelis are in a grim mood. The gloom is fed by the leading candidates, all of whom are seeking to outdo one another in sombre assessment of the challenges that lie ahead.

At the start of his Middle East presidential mission, Senator George Mitchell has listened to President Barack Obama's recommendation earlier in the week on Al-Arabiya television that he 'should start by listening, because ultimately we cannot tell Israelis and Palestinians what's best for them.'

The new U.S. President was as good as his word. Within 48 hours of taking the helm, Barack Obama declared it 'will be the policy of my Administration to actively and aggressively seek a lasting peace between Israel and the Palestinians as well as Israel and its Arab neighbours.'