Periscope.(Israel plans border moat)(Vicente Fox)(Standard Chartered Bank acquires Hsinchu International Bank)

Byline: Kevin Peraino and Joanna Chen, Joseph Contreras, Jonathan Adams, Sean Smith, Nisid Hajari

Israel: Playing Keep Away

In search of a creative way to stop militants and weapons smugglers from infiltrating from across the Egypt-Gaza border, Israelis are talking about building a 10-kilometer moat filled with Mediterranean seawater along the southern boundary. The plan was first considered seriously at the start of the second intifada in 2000, and in 2004 the Defense Ministry went so far as to open bids for construction. But the project was later dropped after government legal experts feared it would require destroying hundreds of Palestinian houses along the canal route. Brig. Gen. Tzvika Foghel, who studied the idea in 2001 as the Israeli military's Southern Command chief of staff, says geologists warned that if the construction wasn't done right, it could contaminate water supplies in both Gaza and Egypt and destabilize land under Palestinian homes. It would also have been prohibitively expensive, he says, at roughly $250 million.

That doesn't matter so much now. After this summer's conflicts--during which militants used tunnels from Gaza to Israel to kill and capture Israeli soldiers--the idea has gained new currency. Nervous Israelis are increasingly eager to put as much distance as possible between the Jewish state and its perceived enemies. In recent weeks, U.S. and Palestinian diplomats have complained that Israel has stopped issuing visas to some longtime West Bank residents, splitting up Palestinian families. And last week Prime Minister Ehud Olmert announced he would bring hard-liner Avigdor Lieberman--a Russian immigrant who favors redrawing Israel's borders to exclude some Arab Israeli villages--into his governing coalition. "I don't believe in coexistence," Lieberman told NEWSWEEK recently. Neither do a growing number of his countrymen; polls show strong support for Lieberman's hawkish platform. Even Foghel now says he's convinced the moat is "a good solution," adding that Gaza residents might grow to like relaxing by their new waterway, and even fishing in it. "It will be something nice to look at," he says.

Kevin Peraino and Joanna Chen

Mexico: Oaxaca Tragedy

It was a trying week for Mexico's lame-duck President Vicente Fox. The man who took office six years ago pledging to secure a comprehensive immigration accord with Washington stood by helplessly as President George W. Bush signed legislation to erect new fencing along 1,126km of the U.S. border with Mexico. Fox's faith in free trade has been called into question by allegations that Washington has levied illegal duties on Mexican steel exports. And with just over a month to go before Fox steps down on Dec. 1, a long-simmering political crisis in the state capital of Oaxaca boiled over on Friday when plainclothes policemen opened fire on left-wing protesters, killing an American freelance videojournalist and two others.