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Israel's governing "troika" met yesterday in order to find a way out of the conundrum Israel finds itself in, following the bombing of the school in Jabalya, where dozens of Palestinian civilians were killed. The character of the meeting had already been marked by the warning Israel received from U.S. president-elect, Barack Obama, who broke his silence on the fighting in Gaza and made it clear that he will have a great deal more to say after his inauguration.

The announcement from the Bush White House that for the time being Israel could carry on its offensive was little consolation. Obama made it clear that starting on January 20 the rules of American involvement in the region will change, and his administration will be a lot more active in pushing the diplomatic process between Israel and the Arabs forward.

Obama's timing, after the strike on the school, signals the direction the U.S. will turn in its attitude to the region: It will support Israel, but will oppose any harming of Palestinian civilians. This means that Israel will find it difficult to close the crossings into the Gaza Strip at will.

Senior officials in Jerusalem said yesterday that Israel has two to four days, at most, for this operation. The talks of the political leadership yesterday also revolved around the question of how Israel should end the operation.

Prime Minister Ehud Olmert would like a diplomatic agreement that will center on countering the smuggling into the Strip. The problem is that Egypt is unwilling to be party to an agreement that will lay the responsibility at its feet, and is opposed to the deployment of foreign observers on its soil. Cairo is also worried that Israel is trying to dump the Gaza Strip on Egypt, by opening the Rafah crossing. So far the American efforts to promote a deal through Egypt are stuck.

Defense Minister Ehud Barak said that Israel should hold direct talks with Egypt to reach a tacit agreement on preventing smuggling. Israel would agree to a bolstered Egyptian presence in the Sinai peninsula - and President Hosni Mubarak invited Israel to talks on improving the current security arrangements.

Foreign Minister Tzipi Livni is concerned that a diplomatic agreement may be imposed on Israel - which would elevate Hamas, equating it to a sovereign state like Israel. Livni favors a unilateral withdrawal from Gaza the minute the IDF says its mission is completed.