Israeli businessman Sammy Ofer, whose company Ofer Brothers is embroiled in a scandal over illegal trade with Iran, was found dead at his Tel Aviv home on Friday, media reports said. He was 89.

Ofer, a shipping magnate who was one of the founders of the Ofer Brothers Group, died early on Friday of a "serious illness," Israeli public radio said, without giving further details.

Israel will resume the transfer of Palestinian tax revenue funds that it froze after a unity deal between rival Fatah and Hamas, Strategic Affairs Minister Moshe Yaalon said Monday.

"We have unblocked the funds because we have established that the agreement between Fatah and Hamas has had no effect, the security cooperation (between Israel and the Palestinian Authority) continues on the ground," Yaalon told Israeli public radio.

Israel's government watchdog announced on Thursday he would investigate Prime Minister Benjamin Netanyahu amid accusations private businessmen paid for lavish trips for him and his family.

State Comptroller Micha Lindenstrauss said he would probe whether the funding for the trips did not "contravene accepted norms of conflict of interest for ministers."

Yoram Cohen, an Arabist with 30 years experience at Israel's internal security service, Shin Bet, has been appointed as its new director, the prime minister's office said.

Cohen, who replaces Yuval Diskin and will assume the position on May 15, was named by Benjamin Netanyahu on Monday night.

Israeli troops on Tuesday arrested around 40 people in a village near Nablus as they continued hunting the killers of an Israeli family, Palestinian sources said.

Troops entered the village of Awarta shortly after midnight and began searching dozens of homes, seizing an unspecified number of computers, security sources and witnesses said.

Prime Minister Benjamin Netanyahu said Friday that Israel is ready to act with "great force" against militant attacks; a day after Israelis launched retaliatory strikes in Gaza.

Israel had been "subjected to bouts of terror and rocket attacks," Netanyahu said following a spate of rocket fire on southern Israel from Gaza and a bombing in Jerusalem that killed one and wounded more than 30 people.

The U.S. Embassy said Monday it was "deeply concerned" by Israel's plans to build hundreds of new homes in the West Bank following a deadly attack on a settler family, calling Israeli settlements "illegitimate" and an obstacle to peacemaking.

In a rare interview to the Israeli media, the Palestinian president reached out to the Israeli public, decrying the weekend attack in the settlement of Itamar as "despicable, immoral and inhuman." But he rejected the Israeli suggestion that his government was indirectly to blame.

The Security Council on Monday issued a new condemnation of tensions along the Lebanon-Israel border as it renewed the mandate of the United Nations Interim Force in Lebanon without changes to its rules of engagement.

In a unanimous resolution, the Council said it had determined that "the situation in Lebanon continues to constitute a threat to international peace and security" and had therefore decided to extend UNIFIL's mandate until 31 August 2011.