Hizbollah and Israel completed their prisoner exchange.
Hizbollah (the "Party of God") is based in Lebanon. It is a Shia Arab organization that grew out of the Lebanese civil war of 1975-90. During that conflict, the government could no longer control its borders. Palestinian militias (recruited from the Palestinian refugee population in Lebanon) began making more attacks on towns in northern Israel. In 1982 Israel invaded Lebanon to clear the border and stop the attacks. In response to that, and the fact that the Lebanese Shia Arabs weren't doing so well in the civil war, Iran intervened with money, weapons and advisors. The result was a new organization; Hizbollah. Most Iranians are Shias.
The Shia Arabs have generally been persecuted by the majority Sunni Arabs throughout the Arab world. When Iran underwent a revolution in 1979, and was taken over by Shia clerics, it became the major supporter of Shia resistance movements everywhere in the Middle East. Iran became an ally of Syria, mainly because both of them were enemies of Iraq. Hizbollah received money (up to a hundred million of dollars a year) and weapons from Iran. This enabled the 1.5 million Lebanese Shia (about 40 percent of the population) to hold their own against the wealthier Christians and Sunnis during the civil war. Syria has nearly three million Shias as well, and is ruled by members of the Alawite religious minority. So getting cozy with Iran and the Lebanese Shia seemed like a good idea to Syria.
In addition to helping the Shia defend themselves, Hizbollah also addressed the relative poverty of the Lebanese Shia by using the Iranian money to set up schools and medical clinics. They also organized the production of opium and heroin in southern Lebanon, creating an operation that provides another hundred million dollars a year for Hizbollah operations, and jobs for Shia Arabs.
The Iranians got something in return, the ability to send organizers from Iran to recruit Lebanese Shias for a terrorist organizations. The Iranian Islamic radicals believe that Israel must be destroyed and the world converted to Islam. This puts them at odds with Sunni Islamic radicals, who also believe the world should be forcibly converted to Islam, but to the Sunni version of Islam. Shia only comprise about 11 percent of all Moslems, so the Sunnis don't take Iranian Shia radicals objectives seriously. In the meantime, Sunni and Shia radicals sometimes cooperate in their effort to kill infidels (non-Moslems.)
Hizbollah attacked Israeli and their Lebanese allies in southern Lebanon for nearly two decades until Israel withdrew in 2000. Since then Hizbollah has been providing more weapons, money and technical advisers to Palestinian terrorists. The prisoner exchange mainly involved Palestinian prisoners being released from Israeli jails. So this has made Hizbollah very popular among Palestinians. That popularity also got a boost in 2000, when Israel withdrew from it's south Lebanon security zone. The withdrawal was because Israeli were tired of the Israeli troop casualties from Hizbollah attacks. It was also implied, but never said outright, that a deal had been made with Syria to keep Hizbollah from continuing it's war against Israel in northern Israel. But the Israeli withdrawal, to many Palestinians (and Arabs) validated the use of terrorism and suicide attacks over the long term.
Hizbollah's growing popularity among Palestinians is not a ploy by Hizbollah to have a say in Palestinian politics. The several thousand Hizbollah radicals who are really into world wide Islamic conquest see the destruction of Israel as attainable and working with Palestinian radicals as a rational course of action. The next target is the United States, which is seen by Iranian radicals as "The Great Satan." Hizbollah has already killed nearly 300 Americans. Since 2001, the United States has been looking at Hizbollah as an eventual foe that must be confronted directly. To Arabs, this means an eventual American invasion of Lebanon and war with Syria.
Hizbollah has several hundred members overseas, who have been linked to terrorist attacks against Jews in Argentina, kidnappings and other activity. Despite this international infrastructure, Hizbollah has concentrated on it's work in Lebanon, which is mainly building Shia Arab power in Lebanon. This is often done at the expense of the Lebanese government. Hizbollah controls most of southern Lebanon, including the Israeli border.
The recent prisoner swap (one kidnapped Israeli for over 400 Palestinians and Lebanese) with Hizbollah was negotiated with the help of Germany. Israel hoped this deal would open up a negotiating arrangement with Hizbollah that would help keep the peace on the Lebanese border. But Hizbollah is bragging about the swap as proof that kidnapping Israelis pays off. If Hizbollah returns to its kidnapping tactics of the 1980s, especially if it again grabs Americans, the long feared second Israeli invasion of Lebanon could take this place, but this time with American forces as an ally.
In Jerusalem, a Palestinian policeman acting as a suicide bomber, killed himself and ten other while riding a bus. This act will hurt opposition to the Israeli security wall, which is now going up around Jerusalem. Once this portion of the wall is completed, it would have been much more difficult for, say, this particular bomber to have gotten into Jerusalem from Bethlehem.