On February 20, Israeli Prime Minister Shimon Peres called on Likud leader Benjamin Netanyahu to form the next Israeli government. Following this month's elections, in which Netanyahu and Kadima leader Tzipi Livni came out neck to neck, it was Netanyahu who got the backing of 65 Knesset members to form a coalition. Netanyahu has said he would join forces with other Israeli parties such as Kadima and Labor. "We have different approaches in different areas, but we are all together in our desire to act for the good of the state," Netanyahu said. "We will be able to find the common ground to lead the state toward security, prosperity and peace."

For the Palestinians, peace and Netanyahu do not go together, especially when you throw Avigdor Lieberman into the mix. Chairman of the right-wing party Israel Beitenu, Lieberman has reportedly demanded a high price for his help, wanting the foreign, justice and public security portfolios for his own. It is still too early to tell what shape Netanyahu's coalition government will take, but Israeli sources say he and Livni are scheduled to meet on February 22 for talks. Livni's party has oscillated between entering a broad-based coalition with Netanyahu or becoming the opposition; however, it looks as though they will probably not miss the opportunity to be in the government. Livni has, however, said she would not join a far right-wing government. According to Israeli law, Netanyahu has six weeks to form a coalition or else the entire process will start over.

In his press conference with Peres, Netanyahu reiterated his commitment to Israel's security, which was immediately put to the test just hours later. On the morning of February 21, a Katyusha rocket was fired from Lebanon into northern Israel, lightly injuring one Israeli. Israel immediately responded by firing eight artillery shells back at Lebanon in retaliation.

Naturally, the Palestinians were hardly celebrating at the news of Netanyahu's mission to form a government. On February 20, presidential spokesperson Nabil Abu Rdeineh said the Palestinian Authority would not deal with any new Israeli government not committed to peace and a two-state solution.

Hamas also voiced its opinion of Israel's likely new leader, saying Israel had picked the "most extremist and most dangerous" politician to lead the country. Hamas spokesperson Fawzi Barhoum said Netanyahu's appointment "did not herald a period of peace or stability in the region."

If the United States has any reservations about Netanyahu, they are not showing them. On February 20, White House spokesman Gordon Duguid said Washington would deal with any new government, regardless of its makeup. "We are always optimistic," he said.

The day did not indicate much optimism, however, on several fronts. Israel bombed six tunnels on the border between Rafah and Egypt and Palestinians fired 10 mortar shells into Israel. On the diplomatic front, Egypt withdrew its commercial delegation from negotiations with Israel on February 20, citing technical reasons rather than political motivations. Earlier Israeli media reports said the move was due to Egypt's failure to successfully broker a ceasefire in Gaza. The breakdown in truce talks between Hamas and Israel came earlier in the week when Israel insisted that any truce must be linked to the release of soldier Gilad Shalit, captured by Hamas in 2006. Hamas immediately rejected the condition, saying this was an attempt by Israel to impose its conditions on the movement.

Talks on a prisoner exchange between Hamas and Israel with Egyptian mediation have made progress but have stalled on three names. According to Egyptian officials, on February 16, the swap reached a standstill over PFLP Secretary General Ahmad Saadat and Izzedin Qassam Brigades commanders Abdullah Barghouti, Ibrahim Hamed and Abbas Al Sayyid. Hamas has insisted on the release of these men in exchange for Shalit, in addition to hundreds of other prisoners including West Bank Fateh Secretary Marwan Barghouti. Media reports have hinted that Israel will ultimately give the okay for Marwan Barghouti's release in exchange for its captured soldier.

A day earlier, Egypt also announced that the Palestinian conciliation dialogue, scheduled for February 22, would be postponed and a new date set later. Egyptian officials said the postponement was in order for factions to further bridge the gaps between them and come prepared for reconciliations once the talks are rescheduled. Egypt reaffirmed, however, that the Gaza reconstruction summit planned for March 2 is still on schedule. The summit, which will be held in Sharm Al Sheikh, will reportedly host leaders from 70 countries.

Three US Senators, including Democratic Senator John Kerry, visited the Gaza Strip on February 19 to assess the damage resulting from Israel's 22-day invasion of the Strip. On February 21, news broke that Kerry had inadvertently been given a letter from Hamas to take to US President Barack Obama via UNRWA head Karen Abu Zayed. Kerry, who said he did not know he was carrying a letter from Hamas, handed it over to the US Consulate, which said it would be "handled through the appropriate channels." Hamas, on its part, denied it had sent any letter to Obama, saying if it did want to send him a message, they would not use this method.

Also on February 19, Israeli F-16 planes bombed several more tunnels on the border between Rafah and Egypt, damaging several homes in the process.

In Jerusalem, Israel seems to be zeroing in on complete isolation of the city. On February 17, Israeli authorities closed the Dahiyet Al Barid gate in the separation wall, which has so far been used by Jerusalem residents in that area to reach Jerusalem. Not only do these 60,000 residents now have to travel through the much longer, circuitous road via the Qalandiya checkpoint, but they are now, for all practical purposes, on the West Bank side of the wall. Palestinians in Jerusalem say this move puts Israel one step closer to its goal of confiscating their Jerusalem ID cards and forever excluding them from Jerusalem.

Israel's plans in Silwan seem to fall right into this scheme. On February 20, head of the Jerusalem unit in the Palestinian presidential office, attorney Ahmad Ruweidi said Israel is planning the largest expulsion of Palestinians since 1967. He says Israel plans to expel 1,500 residents from their homes in the Bustan quarter of Silwan to make way for a public park. In Sheikh Jarrah, Israeli authorities are also working on the evacuation of 27 homes.

Even the Israeli government admits it wants more Jews in Jerusalem, saying that if the status quo remains the same, Jews will be outnumbered in 25 years. According to Ruweidi, Israel's goal is to bring down the Palestinian population in Jerusalem by 12 percent by 2020.

On February 18, President Mahmoud Abbas said the PA would not negotiate with any Israeli government as long as settlement activity continued. His statement came after Israel's announcement that the E-1 settlement project in Jerusalem was in the execution stage and would eventually sever the West Bank completely from east Jerusalem. Abbas was also setting the stage in preparation for Benjamin Netanyahu, who has always opposed any dismantlement of settlements. On this note, on February 17, 1,700 dunams of land were confiscated in Bethlehem for the expansion of the Efrat settlement.