The right-wing Jewish Home party is threatening to quit Israeli Prime Minister Binyamin Netanyahu’s coalition government if he agrees to American demands to back the creation of a Palestinian state during talks with U.S. President Barack Obama at the White House on Monday. At the same time, Labor Party ministers in Netanyahu’s government are insisting that the two-state solution is the only way forward in the peace process and warn that Israel risks a head-on collision with the Obama administration over the issue. Since his election in February, Netanyahu has refused to explicitly endorse the creation of a Palestinian state, although his government says it is bound by the internationally backed 2002 Road Map peace plan that commits all parties to a two-state solution. “We did not join this government to establish a Palestinian state, but to stop this terrible idea,” said Uri Orbach of the Jewish Home party, which has one cabinet post. “Our position is clear to the prime minister and we believe that it is his position as well. We are reminding him that there are domestic coalition agreements that take priority over international pressure. We are opposed to the two-state solution. We believe it is not a solution – it is the start of a problem and it makes existing problems worse.” But Avishay Braverman, a Labor minister in Netanyahu’s government, believes the opposite is true. “There is no doubt that the prime minister clearly understands what every leader in the world today understands, that Israel must make progress in the diplomatic negotiations to arrive in the end at a diplomatic solution with Syria and with a Palestinian state and with all the Arab states.” But Netanyahu’s doubts about a Palestinian state are likely to be reinforced by the news from Cairo, where unity talks between Hamas and Fatah appear to have yielded their first concrete results in five long sessions over many months. The two sides agreed on Sunday to establish a joint security force in Gaza. The idea of U.S.-trained and EU-salaried Fatah security personnel working side-by-side with Hamas gunmen will present an interesting challenge. In the West Bank, Fatah loyalist security forces are being trained by U.S. Gen. Keith Dayton to hunt down and arrest Hamas terrorists.

While Israel tries to convince the world of the threat from Iran and its Holocaust-denying president Mahmoud Ahmadi Nejad, a new poll of Israeli-Arab attitudes suggests there may be problems closer to home. According to the latest survey by the University of Haifa, more than 40% of Israel’s million-plus Arab citizens believe the Holocaust never happened and 41% deny Israel’s right to exist as a Jewish state. The annual Index of Arab-Jewish Relations in Israel survey has been conducted every year since 2003 by Sammy Smooha, professor of sociology at Haifa University. The survey examines the attitudes of Arab and Jewish citizens toward each other and toward the state, covering 15 key issues that divide the two communities. It appears that Israeli-Arab opinion has hardened in the past few years. In 2006, only 28% of those questioned denied the Holocaust, and in 2003 more than 65% recognized Israel’s right to exist as a Jewish and democratic state. The number of Arab citizens who believe that “any means,” including military, should be used to improve their conditions has risen from 5.5% in 2003 to 12.6% in the most recent survey, conducted in 2008. Smooha says the study “serves as a scientific instrument for measuring and monitoring attitudes of Israel’s Arab minority and Jewish majority on coexistence questions, for assisting policy-making and coexistence organizations, and for promoting democracy and tolerance.”

The Israeli economy is now officially in recession. The world economic crisis has caught up with Israel, and the next few months will tell whether Binyamin Netanyahu’s new government has the ability to deal with it. Last week, the government approved an economic “package deal” hammered out in concert with the trade unions and employers’ representatives that commentators described as a 180-degree reversal of Netanyahu’s economic promises during the election. According to data published by Israel’s Central Bureau of Statistics, the economy slumped at a rate of 3.6 percent in the first quarter of 2009. The Bank of Israel forecasts that GDP growth will shrink to 1.5% this year, creating the worst recession since the state was founded in 1948. Foreign investment is down by 30%, exports have fallen 46% and imports are down 63%. Unemployment is also set to rise. High-tech companies are shedding jobs and Israeli start-ups acquired by U.S. giants are closing. Last week Amdocs, the flagship Israeli computer services company, announced it was firing 1,000 workers. "Over the past year, 13,000 industrial workers have lost their jobs… and 8,000 more employees will be fired from industrial factories by the end of the year unless global demand recovers," chairman of the economics committee of the Manufacturers’ Association, Ori Yehudai, told reporters on Sunday. The employers predict that unemployment in Israel will hit 8.7% by the end of the year, with 250,000 people out of work. The government’s economic “package deal” is designed to soften the blow by pouring new investment into tourism and infrastructure projects to attract foreign cash and build the basis for future economic growth. The figures look grim, but Israel’s 3.6% growth slump pales in comparison with the United States, where the economy is currently contracting by 6% per year.

Dubai already boasts the world’s largest shopping mall. Next year it will also have the world’s largest airport, containing the world’s tallest air traffic control tower. The Dubai Mall, which cost $6 billion to create, covers 1. 1 million square meters (12 million square feet), has 1,200 shops and employs 10,000 people. Its two food courts can seat 3,000 people and there is enough parking for 14,000 cars. It also houses the Dubai Aquarium and Underwater Zoo. Visitors are able to gawp at the 33,000 aquatic animals through the world’s largest acrylic viewing panel. Even in these recession-hit times, the mall is managing to attract huge numbers of visitors. Retailers report sales up by 33% in the first quarter of the year. Nearby, the Dubai government is set to open the first phase of its massive Dubai World Central project with the inauguration of the $66-billion DWC-Al Maktoum International Airport in June 2010. When completed, the airport will have an annual capacity of 161 million passengers. At 91 meters (300 feet) tall, its air traffic control tower is the tallest freestanding tower at any airport in the world.