The left-leaning Labour Party, already trailing in the polls, lost on 11 December two of its most prominent members, Yossi Beilin and Yael Dayan, who were disappointed at their poor results in the party's internal elections. The two outspoken peace activists defected to the secular left-wing Meretz party, deepening the crisis in the beleaguered peace camp, which has suffered from the Israeli public's strong shift to the right over the course of the two-year intifada. The move by Beilin and Dayan is expected to split the left-wing vote further, thereby strengthening the hand of the far-right Likud party, which remains set for victory in the polls.

Israeli military action continued unabated in the occupied territories. Among the latest fatalities were a disabled man shot dead in the West Bank and a mother and her two children killed in Rafah. Tensions on the West Bank are rising ahead of Christmas, following Israel's warning that Palestinian leader Yasser Arafat should not attend the traditional ceremonies in Bethlehem. The Palestinian high court has also come in for strong criticism from Tel Aviv for ordering the release of Fuad Shubaki, who has been imprisoned under international guard since May for his part in an attempt to smuggle a shipment of weapons into Gaza from Iran. The court ordered Shubaki's release on 10 December on the grounds that there was no evidence against him. However, Israel has said that, if freed, Shubaki would be re-arrested and extradited to Israel.