In the looking-glass world of Middle East politics, it is easy to forget that Ahmad Saadat, the imprisoned Palestinian leader Israel summarily arrested in Jericho late on Tuesday, is wanted for masterminding the killing of the Jewish state’s most notorious racist politician-general. Rehavam Zeevi, head of the Central Command in the late 1960s and early 1970s, personally developed and managed Israel’s brutal regime in the newly occupied West Bank. After retiring from the battlefield, he waged a relentless war against “the Arabs” on the political front. His Moledet party, founded in the 1980s, advocated the ethnic cleansing of Palestinians from Greater Israel — in other words, from Israel and the occupied territories.

The news swept across Nazareth last Friday like wildfire. There had been a terror attack on the Basilica of the Annunciation. Just visible, as final darkness fell, were faces etched by a mixture of anger and anxiety. Christians and Muslims, who share Nazareth, were equally shocked at the violation of one of the Holy Land’s most sacred spaces.

Until recently liberal Europeans were keen to distance themselves, at least officially, from the ideological excesses of the current American administration. They argued that the neo-conservative enthusiasm for the “war on terror” — and its underpinning ideology of “a clash of civilisations” — did not fit with Europe’s painful recent experiences of world wars and the dismantling of its colonial outposts around the globe. But there is every sign that the public dissociation is coming to a very rapid end. The language and assumptions of the “clash scaremongers” is permeating European thought, including the reasoning of its liberal classes, just as surely as it once did about the Cold War.

Nazareth was sucked into the eye of a storm last weekend, threatening, briefly, to unleash a conflagration. Three visitors to the Basilica of the Annunciation let off a series of explosions that. As rumors spread of a Jewish terror attack, Nazarenes hurried to the church.

Analysis will be dedicated over the coming days to the significance of Wednesday’s Palestinian legislative elections and what they herald for the Middle East conflict. But that spectacle and Hamas’ starring role in it have overshadowed a far more important drama playing out in the wings. Barely anyone has remarked on the unfolding events at the Herzliya Conference, Israel’s most important annual policy-making jamboree. This week politicians, businessmen, generals, academics and journalists converged on the exclusive seaside resort of Herzliya, near Tel Aviv, to share their thoughts on the country’s central concern, as expressed in the conference’s title: “The balance of national strength and security in Israel.” Based on past form, the discussions and speeches are revealing more about the direction of Israeli policy over the next year than all the Knesset debates, Cabinet meetings and press conferences put together.

Natan Zada had recently moved to the West Bank settlement of Tapuah, where, it was later reported, he had fallen in with the far-right Kach movement. Formally outlawed by the Israeli government, Kach expounds a virulently racist ideology demanding the removal of all non-Jews from the Land of Israel. Once his bus had arrived in Shafa ‘Amr, Zada set his M-16 on automatic and put his beliefs into practice. He killed the driver and three passengers, and wounded another 12, before being overpowered and then beaten to death by angry townspeople

At a muted press conference, the Justice Ministry published the findings of its investigation into the deaths of 13 unarmed demonstrators, Palestinian citizens, at the hands of the police force in October 2000.

Until last weekend, Israel’s one million Palestinian citizens had stayed well out of the debate about the country’s imminent disengagement from Gaza. “It’s not our story,” they would say when pressed. “This is an entirely Jewish conversation.” While for months Jewish car drivers have been flying blue and orange ribbons – showing respectively support for and opposition to the disengagement – car aerials in Israel’s Arab towns and villages remained bare. That is no longer the case. At the weekend, Arab drivers in the Galilee could be seen flying black ribbons to commemorate the deaths of four Arabs shot dead on a bus last Thursday afternoon by a Jewish extremist with his Israeli Army-issued rifle. Now Israel’s Palestinian citizens are part of the conversation, whether they like it or not.

The letter one reporter in Israel wishes he could send news editors who ask him to cover the disengagement:

Dear Editor,

Many thanks for your email asking me to cover the Gaza disengagement for your publication. I was surprised to hear that you needed someone “already on the ground in Israel”, as you put it, and will not be among the publications sending a correspondent to cover the disengagement from Gaza. I know that some 3,000 foreign journalists are expected to descend on Israel in the coming days.

Maybe I should learn to be less sensitive but when director Eran Riklis arrived in Nazareth last month for the screening of his much-garlanded film “The Syrian Bride”, he got off on the wrong footing the moment he walked through the door. A handful of Nazerenes had been invited to a film studies workshop, keen to see an Israeli movie that has won universal praise, as well as more than a dozen awards, for its uplifting and supposedly non-partisan message: that we must never let go of our humanity or our dignity, even in the face of the brutalitising effects of the Middle East conflict.

The Israeli soldier who shot and killed Tom Hurndall, a 22-year-old British peace activist, in the Gaza Strip was convicted by an Israeli court of manslaughter this week. Despite more than 1,700 Palestinian civilians having been killed by the Israeli army in this intifada, few soldiers are ever brought to account. Here, journalist Jonathan Cook details an earlier incident in which the Israeli army killed a British UN worker that was covered up.

I couldn’t help but chuckle as I read Uri Avnery’s recent offering, “Death of a Myth”, about the deathbed confession of Naomi Shemer regarding “Jerusalem of Gold”, her song that became a second Israeli national anthem after the Six-Day War of 1967. The Israeli public was apparently duped: Shemer had plagiarised the song from a Basque lullaby. As Avnery implicitly admits, no one was more fooled than he. At the time, he was a member of the Knesset and unsuccessfully tried to pass a law to have the song replace the national anthem, “Hativkah” or “The Hope”.

For a decade Misgav regional council has been seeking to prevent Ali Zbeidat, his Dutch wife Terese and their two daughters from living on land that has belonged to his family for decades. Using discriminatory land laws, the council has claimed jurisdiction over their land, even though it is located inside the Arab town of Sakhnin.

Crowing over his success in breaking up the old Arab order, President George W. Bush has been strongly hinting that the first shoots of democracy pushing up through the sands of the Middle East will soon blossom into peace. Truly representative Arab leaders, we are assured, will put away the qassam and katuysha rockets and embrace their former enemies. The model – at least in the thinking of the White House – is the peace process supposedly under way between the Israeli and Palestinian leaderships, sealed in a handshake last month at the Sinai beach resort of Sharm el-Sheikh. Mahmoud Abbas and Ariel Sharon are now doing business because both speak the same language of democracy – or so the Bush argument runs.

You won’t hear of the plight of my friend Ali Zbeidat and his family or the imminent physical and financial ruin of their lives by Israel, even though Ali’s plight is far from unique. There are tens of thousands of other Palestinians in the same desperate situation as Ali, living in homes Israel defines as illegal.

While the aggressive language of many among Gaza’s 7000 Jewish settlers is making Israeli officials nervous, the government is far more fearful of the response of the wider settler population of the West Bank and East Jerusalem. They number at least 400,000, a significant proportion of them hardline religious Jews who have little time for realpolitik or compromise. They believe they are doing God’s work in settling land that was promised the Jews in the Bible. “Enough with the embraces and love,” Oz Kadmon from Kafr Darom said. “[Prime Minister Ariel] Sharon is a belligerent man and he must be addressed in the language he understands.”

The latest legal maneuvers by the Israeli government to confiscate Palestinian land in East Jerusalem have rightly caused outrage, even among senior Israeli officials. Last summer, it emerged that the government secretly resurrected a 55-year-old piece of legislation drafted in the immediate aftermath of the 1948 Arab-Israeli war. Using the 1950 Absentee Property Law, Israeli officials have the right to seize the holdings of any Palestinian landowner they define as “absent.” The renewed application of the law came to light only after an Israeli lawyer pressed the army for a promised entry permit into Israel for his client, Johnny Atik, a Bethlehem farmer who needed to reach his fields.

For centuries Christians around the world have accepted the Nativity story at face value – that Jesus was born in a stable in the little town of Bethlehem. But a growing number of Bible scholars and archaeologists are rocking the foundations of Christian faith by suggesting they have identified a different Bethlehem as the birthplace of Jesus.

In the Holy Land’s “other” Bethlehem, there are no pilgrims looking for a room – not even at Yosef Yeger’s inn. “Christmas isn’t much of an event in Israel,” says the hotel owner.