The rumblings from Israel over its readiness to strike back if attacked by Iraqi missiles are growing, as officials stress it will not be hampered by the constraints that applied in Operation Desert Storm.
Israel would be free to hit back at Baghdad if Iraq - which fired 39 Scuds into
Israel during the Gulf War 11 years ago - attacked Israeli targets in response to an assault by the US, said Dore Gold, a senior Israeli Government adviser.
His comments came amid growing discussion in Israel of how it would respond to an Iraqi attack, particularly the use of chemical weapons.
Israeli officials are believed to have told the United States that they would hit back, unlike 1991, when the US persuaded Israel to stay out of the war by arguing that its involvement would shatter the Arab coalition.
Recent media reports in Israel, citing Government sources, have suggested this would apply even in the event of an Iraqi attack that caused few casualties, because Israel was eager to maintain its military's powers of deterrence.
Ha'aretz newspaper reported this week that Dr Anthony Cordesman, a military and strategic expert at the Centre for Strategic and International Studies in Washington, told a recent hearing of the Senate's Foreign Relations Committee that Israel would certainly respond with nuclear strikes on Iraq if there was a lethal biological strike on an Israeli city.
Israeli officials have been less explicit about how their Armed Forces would retaliate.
Defence Minister Binyamin Ben-Eliezer has also said several times that Israel would respond, without saying how.
The commander of the Israeli Air Force, Major General Dan Halutz, joined the debate this week by indicating that Israel would strike back.
"You can't take what happened then [in 1991] and think that it will also happen this time, neither in the way the war will be conducted there ... nor in the manner of Israel's reaction," he said.
As Israel's growling grows louder, so does public concern about a non-conventional Iraqi attack. Reports abound of plans to issue citizens with iodine capsules as an antidote to radiation.
In the occupied territories, the mood is different: several hundred Palestinians took part in a pro-Iraq march in Gaza on Thursday, calling on Saddam Hussein to bomb Tel Aviv.
The mood is likely to worsen after the death of a 5-year-old Palestinian boy killed by fire from an Israeli tank advancing to the edge of the Khan Younis refugee camp in the Gaza Strip.
Palestinian security sources and hospital officials said two Palestinian men were wounded when they tried to go to the aid of the boy, Ayman Fares, who was lying outside his house in the densely populated area.
A Palestinian security source said the tank fired without reason.
An Israeli Army spokesman said Palestinian gunmen opened fire on Israeli forces, who returned fire and injured one of the men. The Army said it had no information about the shooting of a boy.
The camp abuts a Jewish settlement guarded by Israeli troops in an area prone to violence.
Army said it shot and killed two armed Palestinians carrying a large bag north of the Israeli crossing of Kissufim, and found a bomb on the men.
nteAlso in the Gaza Strip, the Israeli Army said it shot and killed two armed Palestinians carrying a large bag north of the Israeli crossing of Kissufim, and found a bomb on the men.
Meanwhile, Palestinian Finance Minister Salam Fayyad announced a reform that would help to meet US demands for reviving peace talks.
He said a holding company had been formed to consolidate all Palestinian Authority funds and assets under a single umbrella, an anti-corruption move which may help to satisfy the key mediator in the conflict.
White House spokeswoman Claire Buchan said the move was positive after US President George W. Bush's call for increased transparency and accountability.
The United States has ruled out any Palestinian state until Palestinians weed out corruption, choose leaders "not compromised by terror" and neutralise militants responsible for a campaign of suicide bombings and ambush shootings.
After recent meetings, Israel said it would release to the Palestinians more revenue that it froze after the uprising began nearly two years ago.
But Palestinian militants have kept up attacks and the Israeli Army is still occupying seven West Bank towns it swept into in June after suicide attacks.
Fayyad said Palestinian President Yasser Arafat gave formal approval on Thursday to the creation of the new Palestinian Investment Fund, which would be under the Finance Minister's direct control.
Fayyad, an ex-World Bank official named Finance Minister in a cabinet shake-up Arafat ordered in June under international pressure, said the company would ensure transparency and accountability in Palestinian financial dealings.
Israel's Finance Ministry has slowly begun turning over the funds - estimated at about two billion shekels ($914 million) - to an account run solely by Fayyad to ensure the money is not used to finance what it calls "terror activity".
Israeli Foreign Minister Shimon Peres promised the transfer of another US$15 million ($32 million), his ministry said.
In another development, Israeli human rights group B'tselem alleged that the Army was using Palestinian civilians as human shields for soldiers trying to seize militants linked to suicide bombings.
Palestinian witnesses said Nidal Abu M'khisan, 19, died in a hail of gunfire after he was forced to knock on the door of a house sheltering Nasr Jarrar, a wheelchair-bound Hamas militant wing commander in the West Bank wanted by Israeli troops.
After shooting erupted from Jarrar's house in Tubas village near Jenin, troops shelled and razed it with a bulldozer, killing the Hamas man, the Army said. Military sources denied soldiers put M'khisan in danger to protect soldiers.
In Gaza, hospital officials said a 74-year-old Palestinian woman died of injuries from a July 23 Israeli air strike in which 16 others, including a militant and his aide, also died.
At least 1503 Palestinians and 588 Israelis have been killed since the uprising began after talks on creating a Palestinian state stalled.
- REUTERS
Feature: Middle East
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Israel primed for strike if Iraq starts missile attack
The rumblings from Israel over its readiness to strike back if attacked by Iraqi missiles are growing, as officials stress it will not be hampered by the constraints that applied in Operation Desert Storm.
Israel would be free to hit back at Baghdad if Iraq - which fired 39 Scuds into
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