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Israel Jails Trojan Horse Spies by

The UK-based Israeli couple at the center of a Trojan horse industrial espionage scandal in Israel has been jailed. After a previously reported plea bargain that was accepted, Ruth Haephrati was sentenced to four years in prison, and her husband Michael was jailed for two years. Ruth is said to have sold the Trojan horse spying virus to private investigators, who then used it to steal information on major Israeli companies on behalf of their clients. Husband Michael is said to have written the virus, initially to be used against members of his ex-wife's family. The couple were arrested at their London home last year and extradited to Israel at the beginning of this year. The pair will also pay the victims of their virus £250,000 in compensation, as part of the plea bargain. Israeli authorities have already indicted others allegedly connected to the scandal.

Israeli Exit Polls Forecast Kadima Victory

By VOA News, Ha'aretz &

The polls have closed in Israeli elections, and exit polls show that Ehud Olmert's Kadima Party has won the mandate it sought to set Israel's final border with the Palestinians during the next parliamentary term.

Exit polls show Kadima winning approximately 30 seats in the 120-seat Knesset. The same polls show the center-left Labor Party winning more than 20 seats. Labor is a likely coalition partner with Kadima.

Foreign Minister Tsipi Livni, a prominent Kadima leader, said the results validate Ariel Sharon's decision to move Israeli politics to the center by forming Kadima last year. She said the election results would allow Kadima to complete a full four-year parliamentary term.

In a major political development exit polls show Israel's rightist Likud Party coming in a distant third. However, some polls show Likud in fourth place with 10-12 seats, behind the far-right Yisrael Beiteinu Party. Final results are expected Wednesday.

Ha'aretz commentator Ari Shavit said, "Ehud Olmert did not receive a mandate to carry out a unilateral withdrawal from Judea and Samaria. Yisrael Beiteinu and Shas are clearly against such a move." Even Labor has not come out enthusiastically in favor.

Other commentators pointed out that with the disappearance of Shinui, Kadima's number of mandates is equal to the number of seats held by its members in the previous Knesset plus Shinui's mandates, which appear to have transferred as a bloc.

Rafi Eitan, head of the Pensioners Party, expressed great joy at his party's success. A former Israeli intelligence officer, and the recruiter and handler of imprisoned spy Jonathan Pollard, said last month that if elected to the Knesset, he would work for Pollard's release.

Pollard however, blames Eitan for his expulsion from the Israeli Embassy, into the hands of U.S. authorities and said Eitan said he wished Pollard had been killed so as to avoid the entire affair.

Asked to present his views on the diplomatic situation or on which government he would prefer to sit in, Eitan simply said, "Any leader is acceptable to us, as long as he accepts our demands. We will study the situation and present our positions."

The right-wing bloc, according to the preliminary exit polls, will receive only some 50-52 seats. If the Likud in fact receives as few as is foreseen, Silvan Shalom is expected to demand the unseating of Binyamin Netanyahu as party leader. The Likud MKs whose places in the Knesset are endangered, according to the exit polls, are Natan Sharansky (#11 on the list), Yisrael Katz (12), Chaim Katz (13), Uzi Landau (14), Yuli Edelstein (15) and others.

The Likud, assuming that it will have no genuine role in the next government, is already working on whose fault the failure is. It is widely assumed that Netanyahu will be deposed. Likud senior Ruby Rivlin said that the Likud has great traditions, but it must "consider the reasons why it failed so deeply."

MK Danny Yatom (Labor) said that the results are a "great blow to Kadima, and bring great joy to Labor."

Members of the Yisrael Beiteinu party, headed by Avigdor Lieberman, were not surprised by their positive showing, which is estimated at between 12 and 15 seats according to the various polls.

The exit polls, which have not proven to be particularly accurate in the past, indicate that a fair portion of the Knesset will be replaced next month. New Knesset members will include 6-8 from the Pensioners Party, approximately 10 new Yisrael Beiteinu MKs and about a dozen from Kadima,

As predicted by the surveys of the past few months, the anti-religious Shinui party will not be present in the upcoming 17th Knesset. A statement from the party expressed its disappointment but promised, "Shinui was established 30 years ago and will continue to exist for at least 30 more years."

After Tuesday night's exit poll results Tuesday night, Acting Prime Minister Ehud Olmert called the elections a victory for those in support of his West Bank unilateral withdrawal plan. "I am satisfied with the results though we could have received more. It is still early to talk about coalitions and building a government. We await the official results," adding that he was proud that the party created by Ariel Sharon succeeded in proving itself as a true centrist party.

"In any final outcome, this is a victory for Kadima," said another former Likud member, Defense Minister Shaul Mofaz. "Kadima will form the government. The intention is to fulfill all of our commitments to the voters."

"What is important is that Kadima is alive and kicking," said Kadima MK Ruhama Avraham. "All options are open to Ehud Olmert."

Former Prime Minister Ehud Barak, who refrained from campaigning for Peretz due to political differences between the two, congratulated Peretz for preserving Labor's strength.

Two Israeli Arabs Die in Blast Near Gaza During Elections

By VOA News

Two Israeli Bedouin Arabs were killed in an explosion near the Gaza Strip border Tuesday, as voting was under way in Israeli parliamentary elections that could lead to new borders with the Palestinians.

Israeli military officials said they are investigating if the blast near the agricultural community of Nahal Oz was caused by a new rocket fired from Gaza or a stray ordinance in the region. The Islamic Jihad terrorist group said it fired the rocket to disrupt Israeli elections.

Meanwhile, in an article published Tuesday in Yedioth Ahronoth, Olmert said if his Kadima party leads the next coalition government he planned to move quickly to dismantle small Jewish settlements and merge large blocs into Israel. Olmert said he would not leave any settlement on the other side of the West Bank separation barrier Israel is building.

Hamas: We Reject Olmert's Plan; PLO: We're Ready to Negotiate

By Ha'aretz

Reacting to exit polls that predicted an election victory for the Kadima party, Hamas said Tuesday night that the Palestinian people rejected Kadima leader Ehud Olmert's pre-election declaration that Israel would unilaterally withdraw from parts of the West Bank.

"Our interest is that any party which rules in the occupation state should be brave to recognize the rights of our people in establishing their full sovereign state with Jerusalem as its capital and to free male and female prisoners in their jails and to recognize the right of return," said Palestinian Prime Minister-designate Ismail Haniyeh.

"Let's see how things will develop in the future, at the moment, what we see and what is declared is a unilateral separation plan from Olmert. This plan is rejected by the Palestinian people."

But the Palestinian Liberation Organization on Tuesday night expressed its readiness to negotiate immediately with the next Israeli government on the implementation of the road map peace plan, a spokesman for Palestinian Authority Chairman Mahmoud Abbas said.

Speaking minutes after the announcement of exit polls in the Knesset election, Nabil Abu Rudeineh said: "We hope to see an Israeli government ready to implement the road map and ready to work toward peace."

Rudeineh, who accompanied Abbas to the Sudanese capital for a two-day Arab summit, said the Arab leaders had recommitted themselves to Arab peace initiative and the road map plan for peace between Israel and the Palestinians.

"We're ready to go into direct and immediate negotiations to implement the road map," Rudeineh said. "If the Israeli government is ready, the PLO is ready."

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