1. (C) Palestinian gunmen blew open a six-meter hole in
the wall separating Gaza from Egypt near the Rafah crossing
on the evening of July 14, enabling close to 3,000
Palestinians to cross from Egypt into Gaza. At least one
Egyptian security officer was injured in the exchange of
gunfire; Egyptian forces and the Palestinian presidential
guard have since regained control. The IDF has moved its
forces away from central and southern Gaza Palestinian
population centers. IAF air strikes and tank fire continued
July 14-15, resulting in at least two Palestinian deaths and
injuries to seven others. Abu Mazen has reportedly stepped
up efforts to mediate a prisoner exchange for the captured
IDF soldier in Gaza. The Karni/al-Mintar and Nahal Oz
crossings are closed.



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Rafah Crossing


--------------------------





2. (C) According to ConGen Palestinian contacts in the
president's office and presidential guard, at 1830 local on
July 14 approximately 60-70 armed gunmen blew open a
six-meter wide hole in the wall separating Gaza from Egypt
near the Rafah crossing, enabling an initial 200 Palestinians
on the Egyptian side of the crossing to pass through into
Gaza. Israeli helicopter gunfire attempted to prevent the
gunmen from pouring through the opening, while Egyptian and
Palestinian security sought to regain control the situation.
The gunmen, however, succeeded in passing through the opening
into the Egyptian side of the crossing. In the ensuing
confusion, an additional 2,700 Palestinians awaiting passage
were able to cross into Gaza. The flow of people into Gaza
continued until midnight of July 15 when the gunmen vacated
the area. At least one Egyptian security officer was wounded
in the exchange of gunfire. Egyptian and presidential guard
security have since restored control over the Rafah crossing.



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Military Developments


--------------------------





3. (SBU) The IDF has pulled out of central and southern
Gaza population areas toward the Gaza fence line. Despite
the re-deployment of ground forces, targeted strikes against
suspected militants continued July 14-15. At 1030 local July
15, Palestinian contacts reported an explosion at a house in
the Hamas stronghold of Shaykh Radwan in Gaza City. The
explosion killed one Hamas militant and injured seven others,
including two critically. In the early morning hours of July
15, IDF shelling near Deir al-Balah in central Gaza resulted
in one Palestinian death. The IAF also targeted the Ministry
of Economy building in Gaza City, damaging the top two floors
of the building, including the minister's office. The IAF
has previously targeted the Interior and Foreign Affairs
ministries.



4. (SBU) A total of seven Qassam rockets were launched
from northern Gaza toward Sderot July 14-15. There were no
reported injuries but some damage to buildings. In the West
Bank, the IDF conducted an incursion into Nablus the evening
of July 14, arresting a total of six Hamas and Fatah
activists. There were several demonstrations July 14 in Gaza
(Rafah, Khan Younis, Gaza City) and in the West Bank (
Ramallah, Nablus, Jenin, Hebron) to protest Israeli military
operations in Gaza and in Lebanon.



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Political Developments


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5. (C) According to Palestinian contacts in the
president's office, Abu Mazen is intensifying efforts to
separate the kidnapping of Gilad Shalit in Gaza from the July
12 kidnappings of two Israeli soldiers by Hezbollah. Abu
Mazen has reached out to Hamas officials in Gaza to procure
an agreement for the soldier's freedom in return for the
release of Palestinian prisoners. Abu Mazen has also sent
envoys to confer with Hamas official Muhammad Nazal who is
meeting with Egyptian officials.

WALLES