Because Israeli intelligence is quite certain that Syria has given Hezbollah hundreds of longer range missiles (that can reach most urban areas in Israel), Israel is revising its wartime civil defense plan. The changes involve preparing to disperse more of the population to the countryside. Most of the population can make their own arrangements, but about a third (including many Israeli Arabs) cannot, so transportation and living accommodations will have to be prepared for these people.
In response to the reduction in rockets fired out of Gaza, and terrorist attempts to attack Israeli troops patrolling the border, more supplies have been allowed into Gaza (averaging over 2,000 tons a day in the past week.) Over a hundred Palestinians a day are being allowed to travel to Israel for medical treatment. In the past, Hamas, and other Palestinian terror groups, have used the movement of goods (and people) into and out of Gaza as an opportunity to smuggle weapons in, and terrorists out (into Israel for attacks on civilians).
May 19, 2010: Fatah says they can negotiate a two-state deal with Israel in four months. This is fantasy, as decades of Palestinian propaganda (from all factions, including Hamas and Fatah) describing all of Israel as part of Palestine and pledging no deviation from the goal of expelling all Jews from the region, has made it impossible to get popular Palestinian support for any kind of two-state deal. This is especially true if the Palestinians continue to insist on allowing all Palestinians (and their descendents) who fled the Arab defeat in 1947, on the promise that Arab armies would soon destroy the Jews and let Arabs return, be allowed to return to Israel and become citizens of Israel. This would make Jews a minority, and Israeli Arabs make no secret of how an Arab majority in Israel would be quite anti-Semitic. The Islamic radicals ultimately call the shots among the Palestinians, at least for the moment. Unless this changes, along with the "death to Israel" mantra in the Palestinian media, there will be no peace deal, no matter how much foreign diplomats want it.
The big Palestinian problem remains education (their kids don't get enough) and economics (ignoring it, leaving their kids unemployed, and emigrating or depending too much on the charity of foreigners). This has exasperated foreign donors, who are tired of hearing everything being blamed on the Israelis, when so many Palestinian problems are self-inflicted. The economic disparities are the basis for many problems. Jews move into Palestinian neighborhoods because Palestinians are willing to sell their land or buildings, and move to another part of the world.
The most Islamic radical Palestinian faction, Hamas, continues to purge Fatah supporters in Gaza. Senior Fatah officials there are no longer untouchable, and more of them are being arrested, and their property confiscated. Hamas is not getting enough money from Iran and the Gulf Arabs to run its little police state. This is largely because the Gulf Arabs (who are Sunni) don't trust Iranians (who are Shia, and not Arab) and have cut back their contributions. So Hamas has to increase taxes in Gaza. This makes a lot of people angry, but Iranian security advisors are teaching Hamas how to run an efficient religious dictatorship and police state. Both Hamas and Fatah are forcing charities (supported by Western or Arab money) to pay more for the right to operate in Palestinian territory.
Up north, Iranian ally Hezbollah (representing Arab Shia up there) has the support of only about a third of the population. But Hezbollah has neighboring Syria (also on the Iranian payroll) on their side, and the result in near complete control of southern Lebanon and veto power over any laws passed by the national legislature. Hezbollah threatens another attack on Israel (which may come on orders from Iran). Most Lebanese don't want this, as it would do great damage to the Lebanese economy. But Hezbollah is on a mission from God, and is not bothered with what the rest of Lebanon thinks. Shutting down Hezbollah would cause another civil war, which would be even more destructive. So many Lebanese do nothing, and hope for the best.
Russia has agreed to sell Syria more MiG-29 fighters and Pantsir anti-aircraft missile systems. Both systems have a poor track record, but Syrian patron Iran is not willing to pay for the good stuff. The Syrians don't maintain their weapons or train their troops enough to be a match for the Israelis. So second rate weapons will do just fine.
May 13, 2010: The United States has agreed to provide over $200 million, to pay for at least five Iron Dome anti-missile batteries. Now Israel plans to buy ten batteries, than the earlier seven.
May 10, 2010: Israeli jets bombed two Gaza smuggling tunnels, in retaliation for a rocket fired into Israel two days earlier. So far this year, about fifty rockets and mortar shells have been fired into Israel from Gaza.
May 6, 2010: Egypt has discovered that Palestinian tunnel builders are using welders torches to cut the underground metal wall Egypt has built to halt tunnel building.