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Al-Qaeda No. 2 Ayman al-Zawahri criticized Barack Obama in the terror group's first reaction to his election, calling him a demeaning racial term implying that the president-elect is a black American who does the bidding of whites. The message appeared to be aimed at convincing Moslems and Arabs that Obama does not represent a change in US policies. Al-Zawahri said in the message, which appeared on web sites Wednesday, that Obama is "the direct opposite of honorable black Americans" like Malcolm X, the 1960s African-American rights leader.

Knesset Member Avishay Braverman (Labor), chairman of the Knesset's Finance Committee, responded to plan presented by Finance Minister Ronnie Bar-On, aimed at fighting the global economic crisis, and said it was "too little, too late". Braverman warned that if a new plan is not formed, "Israel's citizens will pay a heavy price." He called for an urgent meeting of the Histadrut labor federation, the employers, the Bank of Israel and the government.

Finance Minister Ronnie Bar-On held a press conference Wednesday and presented the main parts of the Treasury's plan aimed at helping the Israeli economy deal with the global financial crisis. "This is an important message to the financial markets that the government is not capitulating, and you should act responsibly as well," he said. As part of the plan, the government's investment in projects encouraging growth and employment will increase to NIS 21.7 billion (about $5.45 billion) in 2009.

Two Qassam rockets fired from the northern Gaza Strip landed south of Ashkelon on Wednesday. No one was injured and no damage was caused.

International acceptance of Israel's right to exist is not enough, the world must accept Israel as a Jewish state, Foreign Minister Tzipi Livni said at the closing ceremony of the United Jewish Communities General Assembly on Wednesday. "The world is willing to defend the right of the state of Israel to exist, this is the part of the requirement that the [Mideast] Quartet demands [of] Hamas. But I would like to add two more words to this demand of the quartet: They need to accept the right of Israel to exist as a Jewish state," she said.

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Foreign Minister Tzipi Livni announced Wednesday that Israel has made a final decision to boycott the United Nations "Durban II" conference on human rights this spring, fearing it would be used once again as a forum for anti-Israeli sentiment.

The Palestinians are reaching out to the Israeli public to drum up support for a land-for-peace plan backed by the Arab world. The government of Palestinian President Mahmoud Abbas plans to publish full-page ads in the three major Israeli dailies in Hebrew on Thursday. The ads will reprint the peace plan which offers Israel recognition by the Arab world in exchange for a withdrawal from the territories it captured in the Six-Day-War. The Arab peace initiative was first adopted six years ago. Israel has not accepted it. However, there has been renewed interest in the idea in Israel.

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British Foreign Secretary David Miliband said he is hopeful that 2009 will be an opportunity to bring change to the Middle East. Miliband arrived in Beirut after visiting Syria, Israel and the West Bank as part of a Mideast tour. Speaking Wednesday after meeting with Lebanese President Michel Suleiman, he said the next year will be one of change globally because there is a new American president and there will be elections in Israel, Lebanon and Iran, adding that every country needs to think what contributions it wants to make toward peace and stability in the Middle East.

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The body of Shimon Pinto, 35, from Sderot, who went missing last week, was found Tuesday night along Route 6. The body was found after Pinto's former business partner, a retired IDF officer, admitted to having killed him. According to police, the relationship between the two had soured following a business dispute. The suspect, 40, led police to the site where he buried the body, underneath Route 6, near Shoham. The suspect, who is licensed to carry a firearm, claimed that he shot Pinto in self defense. He is set to be remanded in custody on Thursday.

Defense Minister Ehud Barak decided on Tuesday night that crossings to the Gaza Strip will remain closed on Wednesday, Army Radio reported Wednesday morning. The decision follows continued rocket fire on Israel from the Strip. Three Kassam rockets and two mortar shells landed in open areas of the western Negev on Tuesday, causing no casualties or damage.

Foreign Minister Tzipi Livni said at the UJC conference in Jerusalem that "Israel is not the monopoly of rabbis. Israel is a Jewish state, but is not a religious state but a nation state." Livni added, "We must not forget that Israel's ultimate goal is that Israel be a Jewish, democratic state that lives in complete security."

Twenty-two kilograms of hashish were confiscated in a Bedouin community near Dimona during a Negev Police and Border Guard operation on Wednesday. Three suspects were detained in the operation.

In the ongoing war against terror IDF forces detained 14 Palestinian terror suspects in overnight West Bank raids. The suspects were handed over to security officials for questioning.

The Industry, Trade and Labor Ministry is expected to announce in the coming days a 3% reduction in the price of subsidized bread.Last week, the ministry's economists carried out their calculation and reached the conclusion that the price of bread should be reduced by 7.4% However, after examining losses suffered by bakeries in the last year, the inter-ministry pricing committee headed by the Finance Ministry, approved the decision to lower the reduction rate in order to compensate bakeries.

A severed pig's head was hung on the entrance to a Jewish cemetery in Germany over the weekend, next to a sign written in pig's blood reading "six million lies," part of a series of acts of vandalism over the weekend that police suspect were carried out by neo-Nazis.

Some 30 settlers are blocking the Halamish Junction, a few kilometers north of the West Bank settlement Beit El, and are refusing to vacate the area. The settlers are protesting the demolition of an illegal building in the community of Neve Tzuf.

UN Secretary-General Ban Ki-moon told Israel's prime minister on Tuesday he was deeply concerned about the humanitarian situation in Gaza and urged Israel to allow UN aid workers into the territory. Skip related content "The secretary-general today telephoned Israeli Prime Minister Ehud Olmert to express his deep concern over the consequences of the deteriorating humanitarian situation in Gaza," the UN press office said in a statement.

Former Deputy Attorney General Eric Holder has accepted US president-elect Barack Obama's conditional offer to head the Justice Department, a senior Democrat said on Tuesday. Before the offer is made official, Obama's team wants to determine if Holder could win Senate confirmation with broad bipartisan support, the Democrat said. While Obama will be the first black president, Holder would be the first African American to head the Justice Department.

US president-elect Barack Obama on Tuesday called Palestinian president Mahmud Abbas and vowed to continue pushing Middle East peace efforts, a senior official said. In their first conversation since the November 4 US elections, Obama also reiterated his strong support for a Palestinian state living alongside Israel, top Palestinian negotiator Saeb Erakat told AFP.

Iraq's prime minister said Tuesday that a US-Iraqi security pact, though imperfect, was a step toward his country's full sovereignty. He also promised Iraq won't be used for cross-border attacks – a reassurance to Iran and Syria which view the American military presence here as a threat. Also Tuesday, Iraq announced it will hold provincial elections on Jan. 31 for the first time since 2005, when the country was deep in chaos.