President Barack Obama's key Middle East advisor Dennis Ross said Thursday he would resign after a period of turmoil in the Arab world and a difficult period in U.S. relations with Israel.

Ross, a veteran U.S. peace negotiator, said in a statement he had made a promise to his wife to return to private life after two years in the administration -- and had outstayed that promise by a year.

Israeli soldiers shot dead a settler and wounded two others when they opened fire on a car at a roadblock in the West Bank on Friday, the army said.

"Soldiers who had been warned of a suspicious vehicle opened fire, killing one Israeli and wounding two others," a military spokesman told Agence France Presse.

The world must act to prevent Iran from getting nuclear weapons, Israeli Prime Minister Benjamin Netanyahu said on Wednesday after the release of a key report by the U.N.'s atomic watchdog.

"The significance of the report is that the international community must bring about the cessation of Iran's pursuit of nuclear weapons which endanger the peace of the world and of the Middle East," he said in a statement issued by his office.

French President Nicolas Sarkozy called Israeli Prime Minister Benjamin Netanyahu a "liar" in talks with U.S. President Barack Obama, who then complained of having to deal with him daily, a report said Tuesday.

The private conversation, held during the recent G20 summit in the French city of Cannes, was overheard by a number of journalists after it was inadvertently transmitted over a system used for translation, media website Arret sur Images reported.

Israeli President Shimon Peres warned on Sunday that an attack on Iran is becoming increasingly likely, days before a report by the U.N.'s nuclear watchdog on Iran's nuclear program is due.

"The possibility of a military attack against Iran is now closer to being applied than the application of a diplomatic option," Peres told the Israel Hayom daily.

Israeli Prime Minister Benjamin Netanyahu on Thursday ordered a halt to Israel's financial contributions to UNESCO after the U.N. cultural organization granted the Palestinians full membership.

Netanyahu "ordered that Israel's $2 million-per-annum participation in the budget of UNESCO be frozen, following the organization’s decision to accept the Palestinian Authority into its ranks," the premier's office said.

Israel began a major civil defense drill in the Tel Aviv region on Thursday aimed at simulating the response to conventional and non-conventional missile attacks, the military said.

"The rescue units of the civil defense, police, fire service and Magen David Adom (emergency services) will participate in the exercise," an army statement said.

Iran is on alert and will "punish" any Israeli strike against it, its armed forces chief of staff, General Hassan Firouzabadi, warned Wednesday amid Israeli media speculation of plans for an attack.

"We consider any threat -- even those with low probability and distant -- as a definite threat. We are on full alert," he said, quoted by Fars news agency.

Israeli Prime Minister Benjamin Netanyahu and his defense minister Ehud Barak are trying to convince their cabinet to support an attack on Iran, Israeli newspaper Haaretz reported on Wednesday.

Citing an unnamed senior Israeli official, the newspaper said Netanyahu was working to win a majority in favor of a strike against Iran, but there is currently "a small advantage" in the cabinet for those opposed to an attack.

Palestinian leaders reacted angrily after Israel said it would build 2,000 settler homes and freeze the transfer of Palestinian tax funds to punish them for joining UNESCO.

Israeli Prime Minister Benjamin Netanyahu's inner cabinet decided on Tuesday to speed up construction in east Jerusalem and in nearby settlements, a day after UNESCO's general assembly voted Palestine in as a full member.