Earlier on Monday, two Palestinian militants were killed by Israeli forces when they approached the Kissufim commercial crossing on the border between Israel and the central Gaza Strip.

Witnesses said they heard exchange of fire in the area.

Over 160 Palestinians have been killed since Israel launched a massive air and ground offensive in the Gaza Strip on June 28, three days after Palestinian militants killed two Israeli soldiers and kidnapped a third in a cross-border raid.

Earlier, Palestinian witnesses said that undercover Israeli forces opened fire at a group of Palestinians in the city, killing a Palestinian man.

The bloody incident came when Israel continued a weeks-long massive air and ground offensive in the Gaza Strip in a bid to bring home a soldier kidnapped by Palestinian militants on June 25 and halt Palestinian rocket attacks.

The Islamic Jihad, sworn to Israel's destruction, has been behind deadly attacks against Israel in the past.

New Zealand and Japan appealed to Israel to show restraint to prevent a further escalation in Middle East violence.

Fighting between Israeli forces and Hezbollah guerrillas has killed at least 575 people since July 12, more than three-quarters of them civilians in Lebanon, sparking international opposition to the Jewish state's tactics.

Indonesia, the world's most populous Muslim nation, said the latest bombing had been indiscriminate and "a gross violation of internationals laws." The United Nations, it said,must implement an unconditional cease-fire to make way for badly needed humanitarian assistance to the Lebanese people.

In Beijing, Foreign Ministry spokesman Liu Jianchao said "China strongly urges the two sides involved in the conflict to cease-fire immediately to avoid further disaster."

New Zealand Prime Minister Helen Clark said tragedies such as Qana risked "further polarizing and inflaming public opinion" and could undermine the possibility of diplomacy.

"It's hard to believe one is in the 21st century when one sees deaths and horror on this scale," she said.

Japan's top government spokesman, Shinzo Abe, told reporters: "It is extremely regrettable that such an incident occurred amid the calls by the international community for Israel to practice self-restraint."

In the Indonesian capital, Jakarta, about three dozen protesters gathered briefly at the U.S. embassy and demanded that Washington stop blocking U.N. action against Israel's offensive in Gaza and Lebanon.

They called Israeli Prime Minister Ehud Olmert and U.S. President George W. Bush war criminals for allowing atrocities to continue unhindered.

The U.S. blindly supports the Zionist regime by providing weaponry for the attacks. (***)

But Mr Blair, who is on a five-day visit to the United States, refused to utter any criticism of Israeli aggression and even rewrote a speech to make it clear that he pins the blame for the crisis solely on Hezbollah terrorists.

His position appeared increasingly difficult as an array of ministers called for a different response.

Mr Straw, demoted to Commons Leader by Mr Blair, sent out by far the strongest condemnation of Israel. In a statement to Muslim leaders in his Blackburn constituency this weekend, he said: "Disproportionate action only escalates an already dangerous situation.

"One of many serious concerns I have is that the continuation of such tactics by the Israelis could further destabilise the already fragile Lebanese nation."

He acknowledged the right of the Israelis to defend themselves against terrorists and expressed sympathy for Israeli victims of the conflict - but also for the "10 times as many" Lebanese civilians killed or injured.

It is the most serious rebellion over foreign policy Mr Blair has faced since two Cabinet ministers - Robin Cook and Clare Short - resigned over the 2003 Iraq war.

Condoleezza Rice, the United States secretary of state, was back in Israel last night to again try to broker an end to the bloody conflict.

Miss Rice, who dined with Israel's prime minister, Ehud Olmert, said she hoped for agreement on the main conditions for a ceasefire which would be outlined in a UN resolution tabled early this week.

"I expect the discussions to be difficult, but there will have to be give and take," she said. "I assume and have every reason to believe that leadership on both sides of this crisis would like to see it end."

In an address tonight to executives at Rupert Murdoch's News Corporation in Pebble Beach, California, Mr Blair will warn that the West has done too little to stamp out the "underlying cause" of the Lebanon conflict - Islamic terrorism.

The Prime Minister, who during his visit has stood shoulder to shoulder with President George W Bush on the crisis, will make no excuses for the Iraq war and claim that Middle East bloodshed will get worse if the West goes into "waiting mode".

His rhetoric will alarm Cabinet ministers openly protesting that Britain's stance towards Israel is too weak.

Relations between Downing Street and the Foreign Office are said to be at a very low point. Margaret Beckett, the Foreign Secretary, has protested publicly about America's unauthorised use of Prestwick airport as a stop-off point for planes carrying bunker-busting bombs to Israel.

President Bush apologised personally to Mr Blair, but this weekend, two more flights carrying "hazardous" cargoes bound for Israel were refuelling at Prestwick.

Hilary Benn, the International Development Secretary, has told MPs that Israel's decision to bomb Lebanese power stations was "not a proportionate response" while two of Mr Blair's strongest Cabinet supporters - David Miliband, the Environment Secretary, and Lord Grocott, the Labour chief whip in the Lords - said at a Cabinet meeting that Britain should adopt a tougher line towards Israel.

Mr Blair last night tried to play down the split. Speaking on US television, he said: "There was a perfectly good discussion at the Cabinet actually and it certainly wasn't a divisive discussion at all."

But he again refused to condemn Israel, saying: "I will never apologise for being a friend of the United States."

Mr Blair's isolation could bring forward his exit from No 10 - which had been expected in a year. One Cabinet-level source said: "Tony badly needs friends on this - and he hasn't got many."

The use of Prestwick triggered a furious diplomatic row last week after it emerged that the US had broken aviation rules by failing to notify Britain about the flights.

That row is intensifying this weekend as two further American planes carrying 'hazardous' material to Tel Aviv land at the airport.

In another controversial development, Scotland on Sunday has learned that Prestwick is negotiating to allow planeloads of US military personnel on their way to Iraq to stop there.

A well-placed source close to the negotiations said it was bidding to take flights away from Shannon, which is currently used as a stopover for the bulk of the 900 American soldiers who travel from the US to the Middle East every day.


The latest revelations are set to crush hopes among British diplomats that the row over Prestwick would die down following President George Bush's apology to Prime Minister Tony Blair on Friday.

One Irish official said that the bombs would never have been allowed on Irish soil.

The source said: "There is absolutely no way that we would allow munitions or weapons to be shipped through Shannon to a location where there is an actual war going on. We would not allow it. It is correct that we allow the US to transport troops to Shannon, but sending bombs to Israel is another matter and completely out of the question for us."

Opposition critics last night seized on the situation. Scottish National Party leader Alex Salmond said: "It is highly significant that Shannon put its foot down and drew back from allowing the transport of bunker busters, which could become the tinder to escalate dramatically the Middle East conflict."

He added: "It is absolutely appalling that we should allow Prestwick to become a stopover to death and destruction."

Liberal Democrat leader Sir Menzies Campbell said the fact that more flights were now landing in Scotland was "adding insult to injury".

He said: "What price the president's apology now?

The British government should be pursuing an active policy of denying weapons of any kind to anyone in the Middle East who may be assisting the conflict in any way."

However, speaking from America, Blair defended the use of Prestwick: "We should just apply the rules in the appropriate way, which is what we are doing. What happens at Prestwick airport is not going to determine whether we get a ceasefire in the Lebanon.

"If what people are saying is that we should impose an arms embargo on Israel, or indeed on the US, I think that would be very curious indeed."

A spokesman for the Civil Aviation Authority confirmed the authorities had approved an 'exemption' allowing the two new flights to land at Prestwick. The first, a Boeing 747 from Texas, landed at about 1pm yesterday for refuelling. A second flight is due to arrive today.

Residents and politicians in Ayrshire have voiced anger at the flights. The airport has been used by the US as a refuelling point for flights involved in the controversial 'extraordinary rendition' of terror suspects to countries where they are alleged to have been tortured.

A demonstration has been planned for today at Prestwick by anti-war campaigners.

Sources at Prestwick say that if the airport took on even more US military flights, it could employ a further 80 people in the area.

He was accused of taking pictures of military installations along Israel's northern border with Lebanon on July 8, during a visit to a beach. Israeli authorities alleged he was spying for Hezbollah, but never charged him.

Falah had been in Israel to visit his sick mother near Nazareth, according to his son, Suhaib Falah, who lives in Toronto.

"It takes so much pressure off my mind and it's just so heart-warming to hear his voice and know he's alive and he's OK," Suhaib Falah told CBC News. Falah's family said the Israeli-Canadian was sightseeing when he was arrested and did not realize he had taken a picture of a military antenna. Falah told CBC he only wanted to take pictures of the landscape.

"They gave me the camera back with all of the pictures and said I could do whatever I wanted with them," he said.

His lawyer, Hussein abu-Hussein, said he was not allowed to meet or talk to his client before a court appearance on July 26, when the Haifa District Court ordered security officials to either free Falah or to indict him by Sunday.

Abu-Hussein alleged that Falah had been sleep deprived for more than 60 hours while in custody and constantly interrogated.