An American initiative to restart the stalled Middle East peace process gets under way. As the American envoy, Dennis Ross, ends his four-day mediation mission, the parties are as far apart as ever, on the core disputes threatening the future of the peace process. Benjamin Netanyahu thanks Yasser Arafat for helping to locate the Palestinian killers of an Israeli taxi driver. A triple bombing kills at least seven people, including three suspected suicide bombers, in a market in Jerusalem. Madeleine Albright, the American Secretary of State, announces that senior Israeli and Palestinian officials will resume talks in Washington.
Jewish militants celebrate their takeover of two houses in an Arab neighbourhood of Jerusalem.
The Israeli government and Jewish militants sign a compromise to reduce the presence of Jewish militants in houses taken over in the Arab neighborhood. Israel shrugs off controversy over its expansion of Jewish settlements in the occupied West Bank, provoked by plans to build 300 new homes in the settlement of Efrat. Benjamin Netanyahu dents hopes of quick progress in the peace talks with a pledge to continue the building of Jewish settlements on disputed land. Sheikh Ahmed Yassin, the spiritual leader of Palestinian suicide bombers, is released by Israel after eight years in prison. The move is seen as a peace offering after Israel's failed attempt to kill an Islamic leader.