Egypt is making a serious effort to halt, or sharply reduce, the smuggling of weapons into Gaza (usually via tunnels). Special police and army units are working to establish a secure area three kilometers deep, from the Gaza border into Egypt. That area is being searched for contraband, and thousands of weapons, explosives and items of ammunition have been found in the last two weeks. Non-military contraband includes recreational drugs and booze. At least four Egyptian policemen have been arrested recently for taking bribes from the smugglers. Cops don't usually get treated that way, which is sending a message to all the Egyptian security personnel working the border.
Meanwhile, Hamas continues to try and smuggle military materials in among the food and medicine that Israel does allow through. Israel has banned the construction materials (metal pipes) and chemicals used to make homemade rockets, and that limits construction, and reconstruction, in Gaza. But since Hamas refuses to stop the arms buildup in Gaza (using weapons smuggled in, and manufactured locally), Israel won't allow free shipment of goods into Gaza. Hamas is hoping that this policy will result in sufficient foreign diplomatic pressure on Israel to open the borders. Israel says that will never happen.
In Lebanon, Hezbollah is calling on the government to execute the twenty Israeli spies that have been captured recently (several more escaped to Israel before they could be arrested.) The Lebanese government doesn't want to kill anyone, and is interested in finding out as much as possible about the Israeli spying efforts. It appears that only one Israeli spy network was cracked, and that several others exist, and are still operational.
The new Israeli government has told the Palestinians that there can be no peace if the Palestinians insist on getting back all the West Bank territory they had in 1967. Some of that territory must be annexed by Israel is there is to be a peace deal. The Palestinians have been insistent on getting all the territory, and allowing refugees from the 1948 war to return to their homes and property inside Israel. In short, nothing new to report and the peace talks are still going nowhere. Arab language Palestinian propaganda continues to ignore Israel's existence, while still calling for non-existent Israel to be destroyed.
Israeli aircraft have dropped pamphlets over Gaza warning Palestinians to stay away from the border fence (at least 300 meters away), or risk getting shot. More and more Palestinian terrorists are trying to get through the border fence, or plant bombs along it.
May 24, 2009: Egyptian police have arrested seven terrorists, believed responsible for a bombing attack against tourists earlier this year. The men arrested apparently received terrorist training in Gaza. Some of the men also had links to al Qaeda operatives in Europe.
May 22, 2009: Israeli troops went into Gaza before dawn, to kill two Palestinians who were trying to set up a bomb next to the road running along the border fence. The two dead Palestinians were in military uniform.
May 20, 2009: For the first time in two months, a Palestinian rocket from Gaza hit Sderot. One civilian was wounded, and there was some property damage. Israeli responded by bombing more smuggling tunnels on the Egyptian border with Gaza. Two rocket making workshops in Gaza were also bombed. Over 200 rockets have been fired from Gaza, into Israel, since the January 18th cease fire. About one Palestinian a week dies in the smuggling tunnels, mostly from accidents (a collapse).
Iran test fired their Segil 2 ballistic missile, which has a range of 2,000 kilometers, and can reach Israel. Israeli anti-missile systems are designed to defeat such attacks, but if Iran launched dozens of these missiles at once, they could overwhelm those defenses.