The standoff around the Bethlehem church is now into its 34th day, and Israel has thus far succeeded in getting almost 100 people safely out. Still inside are 123 people, most of whom are being held hostage by Moslem gunmen; Israel has no interest in holding them. At least four of the gunmen are high on Israel\'s wanted list for the murder of Israeli citizens. Negotiations for a settlement continue, and reports are that an agreement will be worked out by tomorrow. The Sharon government continues to demand that the terrorists either stand trial in Israel or be deported permanently to a third country. The Arabs, however, want an arrangement along the lines of the Ramallah agreement, involving their incarceration in the PA under foreign supervision.



IDF forces yesterday discovered an explosives laboratory, ready-to-explode bombs, explosive chemicals and hundreds of nails in an \"infirmary\" only 500 meters from the above-mentioned Church of the Nativity. The \"killing center\" was discovered after soldiers heard an explosion and set off to clarify its source. The explosion was apparently the result of a \'work accident\' that fortuitously led to the discovery of the explosives before they could be used against Jews.



Despite the attempt to renew negotiations, Arabs detonated a bomb alongside an IDF tank late this morning. No one was hurt, but in accordance with regulations, IDF soldiers opened fire at suspicious figures seen running from the area - and mistakenly killed a mother and her two children. The IDF has expressed sorrow over the incident, although emphasized that the soldiers acted properly.



In Gaza, IDF forces discovered yet another tunnel used for smuggling arms and weapons on the Israeli-Egyptian border. This was the third tunnel discovered in the past two days, and like the other ones, it will be blown up by the end of the day... IDF forces that entered the PA town of Tul Karem during the night remain outside one of the neighborhoods there, tightly encircling it and ensuring that no terrorists escape. The action was taken in light of intelligence warnings of a likely suicide attack in Israel originating in Tul Karem.