Israel-Palestinian truce ‘likely’

Israeli and Palestinian leaders will sign a truce on Tuesday to end four years of fighting, reports say.

The deal will be agreed when Israeli Prime Minister Ariel Sharon meets Palestinian leader Mahmoud Abbas for talks in Egypt on Tuesday, sources say.

Palestinian negotiator Saeb Erekat said a mutual truce would follow the summit, the highest-level talks between the two sides since the intifada began in 2000.

An unnamed Israeli official confirmed the statement.

“The most important thing at the summit will be a mutual declaration of cessation of violence against each other,” Mr Erekat told the Reuters news agency.

Bush budget seeks deep cutbacks

US President George W Bush has presented his 2006 budget to Congress, cutting 150 domestic programmes in a bid to lower the record US deficit.

The $2.58 trillion (£1.38 trillion) budget includes reduction in subsidies to farmers, and lower spending on the environment, education, and health.

The budget document projects the deficit will rise to $427bn this year, before starting to decline.

Military spending will, however, rise 4.8% to $419.3bn in 2006.

The budget does not include the cost of running military operations in Iraq and Afghanistan, for which the administration is expected to seek an extra $80bn from Congress later this year.