A Swiss court has ordered an Israeli oil firm to pay Iran $1.1 billion in compensation over a joint venture from before the 1979 Islamic revolution, state news agency IRNA said Thursday.

The United States said Wednesday it plans to sell thousands of bombs and missiles to Israel as well as 10 Seahawk helicopters to Saudi Arabia, in deals worth about $1.9 billion each, officials said Wednesday.

The U.S. State Department informed Congress of the proposed arms sales to two allies in the Middle East that are both wary of Washington's negotiations with Iran over Tehran's nuclear program.

EU foreign policy chief Federica Mogherini met Palestinian President Mahmud Abbas Wednesday as a row erupted over a controversial Israeli plan to stop Palestinians using the same buses as settlers.

She met the Palestinian leader at his West Bank headquarters at the start of a 24-hour visit to the region on her first trip to the region since a new rightwing Israeli new government was sworn in last week.

Two Israeli policemen were injured in annexed east Jerusalem Wednesday when they were hit by a car driven by a Palestinian, who was then shot dead, police said.

It was the latest in a string of lone-wolf attacks by Palestinians using their cars to ram pedestrians or police, in a trend which began in Jerusalem in October but has also spread to the West Bank.

Israeli Prime Minister Benjamin Netanyahu on Wednesday ordered the suspension of a controversial measure banning Palestinians from riding the same buses as Jewish settlers when returning from Israel to the West Bank.

The announcement came several hours after a three-month pilot project which was approved by Defense Minister Moshe Yaalon went into action. 

An Israeli court on Tuesday sentenced a Palestinian from east Jerusalem to eight months in prison for "inciting to violence or terror" on his Facebook page.

In its ruling, the Jerusalem Magistrates Court quoted a series of statements and postings by A-Tur resident Sami Dais, 27, on Facebook between July and November last year in which he praised deadly attacks on Jews.

A rights group on Tuesday condemned Israeli court decisions paving the way for the eviction of Bedouins and Palestinians from their villages, calling on the state to let them stay put.

The Supreme Court approved earlier this month the removal of 750-1,000 Bedouin residents from the southern Negev village of Umm al-Hiran to enable the construction of a Jewish town.

Israeli Prime Minister Benjamin Netanyahu will have the final say in future peace talks with the Palestinians, an official said Tuesday, after Interior Minister Silvan Shalom was entrusted to oversee negotiations.

"The prime minister is responsible for the negotiations. Silvan Shalom will be holding the meetings with the Palestinians along with Yitzhak Molcho, the personal envoy of the premier," the official told AFP on condition of anonymity.

Hundreds of Israeli Ethiopian Jews and activists held a rally on Monday evening in Tel Aviv to protest against alleged racism, an AFP journalist said.

The march passed off without incident under the watch of dozens of security officers, a police spokesman said.

Israeli Prime Minister Benjamin Netanyahu has handed responsibility for any future peace talks with the Palestinians to his new Interior Minister Silvan Shalom, an official said Monday.

"The prime minister has charged Silvan Shalom with conducting in his name the negotiations with the Palestinians," the official said on condition of anonymity.