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1. MAHMOUD ‘ABBAS: LET ARAFAT ROAM… As plans for Israeli “confidence-building” gestures to the Palestinian Authority are being formulated, its prime minister-designate, Mahmoud ‘Abbas, has demanded one gesture of his own choosing: freedom for Yassir Arafat to have “full freedom to move within the West Bank and Gaza and outside, without any obstacles to his return.” Until that happens, ‘Abbas says that he won’t travel outside of the region to meet with foreign diplomats in their home countries. The Israeli-imposed ban on Arafat’s travel has been in effect for more than a year and there has been no indication that Prime Minister Sharon has ANY intention of lifting it. In fact, observers say, keeping Arafat in one place is consistent with the Israeli and American attempts to bolster ‘Abbas’s authority and the new prime minister’s demand that the travel ban on Arafat be lifted runs counter to that policy. The Prime Minister has now hedged on the implementation of his “confidence-building” package, telling Sunday’s cabinet meeting that he will wait for “concrete steps” from the new PA cabinet before doing so. Security officials, including Defense Minister Shaul Mofaz and Military Intelligence chief Aharon Ze’evi have warned that a cease-fire could be a strategic tool through which to regroup and rearm terrorist forces. Sharon and Foreign Minister Sylvan Shalom also did an about-face regarding their previously-stated plan to snub visiting diplomats who visit Arafat, and now say they will view such meetings “in a grave light.”

2. LABOR PARTY RIFT OVER COALITION TALK… Labor Party Chairman Amram Mitzna’s comments that Ariel Sharon’s conciliatory policies could lead to his party’s entry into a unity government triggered angry reaction from senior Labor Party officials. Following Prime Minster Sharon’s recent newspaper interview in which he provided tangible examples of the “painful concessions” that he often says Israel is willing to make for peace, speculation rose that the right wing National Religious Party and National Union would end up leaving the coalition and be replaced by the Labor Party. Mitzna fueled that conjecture, saying that it could happen if Sharon implemented his promises. Member of Knesset and former minister Matan Vilnai lashed out at Mitzna, demanding that the issue be discussed by party hierarchy before fueling public expectations. It is believed that Vilnai will challenge Mitzna for party leadership.

3. UNIONS TAKE GIANT STEP TOWARD MASSIVE STRIKE… The long-threatened general strike that the Histadrut labor federation has been using as the stick in negotiations with the Treasury, took one giant step toward fruition when talks were halted last night. Histadrut chief and Member of Knesset Amir Peretz ended negotiations when the government prepared to offer the emergency economic recovery package for a first reading in the Knesset. The unions’ red-line has been its demand that the stringency plan be implemented through negotiations rather than by legislation. The strike is set to begin on Wednesday, the day that the legislative process will begin. The proposed job action will include all employees of the government and local authorities, government companies workers and large privately-owned firms that employ union workers. A shut-down of ports and Israel’s main gateway, Ben Gurion Airport, is also possible, and schools are expected to close. Pressure to pass and implement Finance Minister Binyamin Netanyahu’s emergency program increased with word that the critical American loan guarantees worth $9 billion, will be approved in Washington this week. Unless the plan is approved and implemented, those guarantees can be withheld.

4. FINANCIAL MATTERS: BAD NEWS; GOOD NEWS… Foreign investment in Israel during the first quarter of 2003 plummeted 99.5%, to a mere $6 million, compared to $1.08 billion in the same period in the previous year. According to Globes financial newspaper, the mass exodus of foreign funds was the direct result of the new income tax reform package. But in March, foreign investors sank $137 million into the Tel Aviv Stock Exchange, compared to only $23 million in February. Withdrawals of foreign investments plummeted to $72 million, down from a total of $460 million during January and February. The surge in foreign investment is credited with the strong March showing by the shekel.

5. SARS PREVENTION IMPLEMENTED AT BEN GURION AIRPORT…Passengers arriving in Israel from Hong Kong, Singapore, China, and Canada will have their temperatures taken by health officials at Ben Gurion Airport, it was announced on Sunday. Dr Boaz Lev, director-general of the Health Ministry, told Israel Television that the procedures will not guarantee that SARS will not be carried into Israel, but that checking arriving passengers at the entry point provides some protection. Israel has had several possible SARS-infected patients, but all proved to be false alarms.