Israeli Prime Minister Benjamin Netanyahu has called a meeting of his inner cabinet on Tuesday to consider a response to UNESCO's decision to admit Palestine, officials and local media said.

Israeli media said the so-called Forum of Eight would meet on Tuesday afternoon to discuss a response to UNESCO's decision a day earlier to admit Palestine as a full member despite U.S. and Israeli objections.

Activists and supporters angered over the spiraling cost of living in Israel are to take to the streets of several cities on Saturday following an eight-week break.

The largest protest is expected to take place in Tel Aviv from 9:00 pm (19:00 GMT) under the rallying call of "Return to the Streets", organizers said.

A U.S.-Israeli citizen accused of spying in Egypt arrived in Tel Aviv on Thursday, Israeli media said, freed under a prisoner exchange deal that saw Israel release 25 Egyptian detainees.

Israeli television and radio reported that Ilan Grapel had touched down at Israel's Ben Gurion airport at around 1630 GMT, arriving on a private plane from Cairo, accompanied by Israeli officials.

Israeli Prime Minister Benjamin Netanyahu is ready to partially freeze West Bank settlement building if it will bring the Palestinians back to direct talks, an Israeli newspaper reported on Friday.

According to Haaretz, the offer was made in a conversation with Colombian Foreign Minister Maria Angela Holguin on Wednesday during a surprise visit to the region in order to try and help the parties reach some kind of agreement on how to resume talks.

The Palestinians are not ready to resume dialogue with Israel as sought by the Mideast diplomatic Quartet, Palestinian Prime Minister Salam Fayyad said Wednesday.

"Our own assessment is that the conditions are not ripe at this juncture for a meaningful resumption of talks," he said at the annual gala for the American Task Force on Palestine, a pro-Palestinian lobby.

Israeli soldier Gilad Shalit, who was freed on Tuesday after five years in detention by Palestinian militants, said he hoped the prisoner swap in which he was liberated would lead to peace between both sides.

"I hope this deal helps achieve peace between both sides, Israel and the Palestinians," he told Egyptian television in his first interview since his release.

Israel has formally submitted plans for a new settlement neighborhood in annexed east Jerusalem in what will be the first sector's first new district in 14 years, Peace Now said on Friday.

The new district, Givat HaMatos, will be located on the southern flank of east Jerusalem which lies close to the West Bank town of Bethlehem, in what the settlement watchdog described as the first neighborhood to be planned since the establishment of Har Homa in 1997.

Captured soldier Gilad Shalit is to return to Israel on Tuesday at the same time as 450 Palestinian prisoners are freed if the terms of a swap deal are respected, a senior Israeli official said on Friday.

"We hope that the timetable laid out in the agreement will be respected and that Gilad Shalit will return home on Tuesday," said the official from Prime Minister Benjamin Netanyahu's office told Agence France Presse, saying a first tranche of prisoners would be released at the same time.

Captured Israeli soldier Gilad Shalit is expected to return to Israel via Egypt by next Wednesday, Palestinian sources and Israeli media said on Thursday

A senior Palestinian official said a first group of 450 Palestinian prisoners would be released next Tuesday, followed by Shalit's release on Wednesday.

Israeli police were on high alert in the north of the country on Tuesday after an attack targeting a mosque in a Bedouin village, where locals staged angry protests overnight, police said.

"Large numbers of police remain deployed in the village of Tuba Zangaria," police spokesman Micky Rosenfeld told Agence France Presse.