Greece became the sixth European country to upgrade the diplomatic status of the Palestinian Authority Tuesday, accepting formal ambassador credentials from the Palestinian envoy to Athens.

"I am very proud to be the first Palestinian ambassador to present my credentials to his excellency the president of the Greek republic," the envoy Samir Abu Ghazaleh said, after handing his letters of credence to Greek President Carolos Papoulias.

EU foreign policy chief Catherine Ashton on Tuesday said the international community still sought to achieve a peace deal and a Palestinian state by September, despite the region's political turmoil.

Despite the impasse in Israeli-Palestinian peace talks and the resignation of the Palestinian cabinet as well as Saab Erakat, their chief negotiator, Ashton said the goal was still achievable.

Police in Greece have arrested a young Palestinian identified in reports as an alleged member of Fatah al-Islam, a police source said Sunday.

Ghaleb Taleb was arrested in Athens and will be deported for illegal entry into the country following questioning by police, the source told Agence France Presse.

Palestinian President Mahmoud Abbas on Monday reappointed Salam Fayyad as premier and tasked him with forming a new government after his cabinet resigned, an official said.

"Abbas reappointed Fayyad and asked him to form a new government," a senior official in the president's office told Agence France Presse shortly after Fayyad's cabinet resigned en masse.

Libyan leader Moammer Gadhafi has urged Palestinian refugees to take advantage of current unrest sweeping across the Arab world and stage a march on the Palestinian territories.

"In the context of the popular Arab revolutionary movement, the Palestinian refugees... must march on Palestine, along with their families," he said in a speech to thousands of supporters marking the birthday of the Prophet Mohammed.

Immigration officers have been instructed to bar Palestinians from entering Egypt, an official at Cairo airport said on Wednesday after 12 travelers were sent back.

"There are instructions to stop Palestinians entering Egypt. Twelve Palestinians were sent back to the places they came from on Wednesday," the official told Agence France Presse, on condition of anonymity.

Access to Jerusalem's flashpoint Al-Aqsa mosque compound was restricted on Friday in a bid to prevent demonstrations in support of the Egyptian uprising after Muslim prayers, police said.

"This Friday, we are forbidding access to the compound to men under 50 years old carrying an Israeli identity card," Israeli police spokesman Micky Rosenfeld told Agence France Presse.

German Chancellor Angela Merkel urged Israeli Prime Minister Benjamin Netanyahu on Monday to seek a swift revival of peace talks with the Palestinians citing regional unrest as cause for urgency.

At a joint press conference with Netanyahu on the first day of a visit to Tel Aviv that included a joint German-Israeli cabinet meeting, she spoke of "troubled times" against a backdrop of civil revolt in Egypt and Tunisia.

The Middle East peace process lay in tatters Wednesday after Washington admitted defeat in its efforts to secure an Israeli freeze on settlement building, the Palestinians' condition for resuming talks.

Speaking late on Tuesday, U.S. officials admitted top-level efforts to coax Israel into imposing new curbs on West Bank settlement construction had gone nowhere, prompting Palestinian president Mahmoud Abbas to declare a crisis in peace efforts but backslapping among Israeli hardliners.

Israeli helicopter gunships fired missiles at a building near the southern Gaza Strip city of Khan Younis on Thursday, targeting suspected militants, the military said.

Witnesses said the strikes hit a multi-storey building and that tanks also opened fire shortly afterwards. Palestinian medical sources said there were no casualties and that a group of people inside the building were able to escape.