Peace talks got off to a rocky start Wednesday, with the Palestinians criticizing Israel for a construction project planned in disputed east Jerusalem, and Israel complaining about continued rocket fire from the Gaza Strip.
The Palestinians have said the planned construction in the Har Homa neighborhood, along with Israeli military activity in the Gaza Strip, have threatened to undermine the new peace talks.
The Palestinian delegation "introduced the issue of Har Homa and expressed our outrage," said negotiator Saeb Erekat.
"We are coming to negotiate over Jerusalem and borders, and the dictation and facts on the ground continue," he added. "If you want to restore the credibility of the peace process, the Israeli government must revoke this order." He said there were no immediate plans to meet again.
A long way to go
Wednesday's meeting was the first formal negotiating session since Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas relaunched the effort at last month's Middle East conference in Annapolis, Md. The last peace talks broke down in violence in January 2001.
At the gathering, the two leaders set an ambitious target of December 2008 for concluding a peace agreement that would end six decades of conflict.
The troubles at Wednesday's meeting, which lasted only 90 minutes at a Jerusalem hotel, showed just how far the sides have to go.
Initially scheduled to kick off with a ceremonial launch at the ornate King David hotel, the talks were held secretly at another hotel in the city. Negotiators sped away from the meeting without commenting to reporters who discovered the site of the talks after they had begun.
Conflicting claims to Jerusalem are just one of the thorny issues to be resolved in the coming year.
Jerusalem at center of dispute
The Palestinians seek east Jerusalem, which Israel captured in the 1967 Middle East War, as the capital of a future independent state.
Israel considers all of the city its capital, though Olmert has signaled he would be willing to relinquish outlying Arab neighborhoods.
Other core issues negotiators must tackle include the final borders of a Palestinian state, the future of Jewish settlements in the West Bank and the fate of millions of Palestinian refugees whose families lost properties during Israel's 1948 War of Independence.
The Hamas militant group's violent seizure of the Gaza Strip in June has further complicated matters. Abbas' lack of control over Gaza has raised questions about his ability to carry out any future peace deal.
Discussing Wednesday's talks, an Israeli official confirmed the Palestinians complained about Har Homa, Jewish settlement construction in the West Bank and Israeli military activity in Gaza.
Rocket barrage from Gaza
The official, speaking to The Associated Press on condition of anonymity because he was not authorized to discuss the meeting with the media, cited a "tense atmosphere" and said Israel complained about ongoing Palestinian rocket fire from the Hamas-controlled Gaza Strip.
Early Wednesday, Palestinian militants fired 20 homemade rockets toward Israel, causing minor damage and lightly wounding one woman, Israeli officials said.
The barrage came hours after Israeli forces ended a broad incursion into the coastal strip that killed six militants and left a wide swath of damage in its wake.
Israel is pursuing peace with Abbas' moderate government in the West Bank. At the same time, it continues to battle the Hamas militant group, which has ruled Gaza since defeating Abbas' forces in June.
Israel regularly carries out brief ground incursions and airstrikes in Gaza in a bid to stop Palestinian rocket and mortar attacks on southern Israeli towns.
In southern Israel, the mayor of the small town that has borne the brunt of the rocket attacks announced his resignation, saying the situation is "impossible." Eli Moyal said he hoped his resignation will spur authorities into action against Hamas.
The Islamic Jihad militant group said it fired nine of the rockets to avenge Israel's incursion. "The resistance is going to escalate the operations targeting the Zionist colonies in the coming hours," said Abu Ahmad, a spokesman for the group.
Later Wednesday, an Islamic Jihad militant was killed while firing a mortar in central Gaza. The group said the man was killed by Israeli fire, but the Israeli army said it was not in the vicinity.
Tuesday's operation, in which tanks and bulldozers pushed 2 1/2 miles into southern Gaza, was the broadest push since the Hamas takeover. Early Wednesday, the troops had withdrawn to a buffer zone along the Israeli border.
The Israeli forces left behind heavy damage to al-Fukhari, a farming community near the southern town of Khan Younis.
About 75 acres of olive trees and orange groves were uprooted, greenhouses and the outer walls of homes were damaged, and homes were left without power, said Ouda Alomar, mayor of the community.
Repair crews were trying to restore electricity and reopen roads that were closed with dirt mounds put up by the troops, he said.
Olmert convened his security Cabinet, a group of top political and defense officials, to discuss the Gaza situation. Officials decided to continue the police of brief incursions into Gaza, but decided against launching a broad invasion of the area.
One Cabinet member, speaking on condition of anonymity because he was not authorized to talk to the media, said officials are concerned that a broad invasion would cause heavy casualties to Israeli troops and damage the prospects for peace talks.