Palestinian President Mahmoud Abbas on Wednesday congratulated U.S. President Barack Obama on his re-election and called on him to pursue Middle East peace efforts.

Abbas "congratulated U.S. President Barak Obama on his re-election as U.S. president for a second term," said a statement carried by official news agency WAFA.

Israeli President Shimon Peres on Saturday saluted as "courageous" remarks by Palestinian leader Mahmoud Abbas in which he appears to relinquish Palestinian refugees' right to return to their former homes in what is now Israel.

"Abu Mazen's courageous words prove that Israel has a real partner for peace," Peres said in a statement, using the name by which the Palestinian president is informally known in Arabic.

Israeli Defense Minister Ehud Barak believes Israel should evacuate dozens of isolated Jewish settlements in the West Bank while annexing larger blocs that are home to most of the settler population.

In excerpts of an interview in Yisrael Hayom published Monday, Barak said he was mulling a plan which would see Israel relinquish dozens of settlements while allowing residents of big blocs -- Gush Etzion, Maale Adumim and Ariel, where up to 90 percent of the settlers live -- to become part of Israel.

About 500 Palestinians on Saturday staged what banners proclaimed a "Festival of the followers of Mohammed" in east Jerusalem in protest against French cartoons and a U.S.-made film offensive to Islam.

"We are all faithful to Mohammed" and "Mohammed the Prophet of Islam," read the banners, brandished alongside flags of Palestinian president Mahmoud Abbas's Fatah movement and the rival Islamist Hamas, in the city's Issawiya neighborhood, an Agence France Presse journalist said.

Palestinian President Mahmoud Abbas has formally protested a decision by Egypt's prime minister to receive Hamas leader Ismail Haniya, a Palestinian official said on Wednesday,.

"The Palestinian leadership and president Abbas are conducting contacts with the Egyptian leadership over the meeting between Egyptian Prime Minister Hisham Qandil and Hamas leader Ismail Haniya," Saleh Raafat told the official Voice of Palestine radio station.

Palestinian Prime Minister Salam Fayyad on Tuesday announced cuts to fuel prices and VAT after more than a week of protests across the West Bank over the spiraling cost of living.

The price of fuel "will be returned to what it was in late August, starting tomorrow," Fayyad told reporters after the weekly cabinet meeting.

Palestinian president Mahmoud Abbas said on Saturday he will make a bid on September 27 to obtain non-member status at the United Nations.

"We will go to the U.N. General Assembly for consultations with our friends on the draft resolution calling for the upgrade of Palestine (to non-member status)" in the United Nations, Abbas said in a televised address.

Israel freed Hamas lawmaker Mohammed Abu Tir on Wednesday after holding him prisoner without charge for a year, the Islamist Palestinian movement reported.

Abu Tir, a lawmaker for Israeli-annexed east Jerusalem, was first arrested in June 2010 and expelled to the occupied West Bank the following December after he refused to leave east Jerusalem despite an Israeli interior ministry order revoking his residency permit over his ties to Hamas

Iranian President Mahmoud Ahmadinejad urged Palestinian president Mahmoud Abbas to rally divided groups of Palestinians together to "free their land," according to his official website on Friday.

"All Palestinian groups should be united, because then they will have more chance of freeing their land," Ahmadinejad told Abbas, who was making his first visit to Tehran to participate in a two-day Non-Aligned Movement summit.

Iran's supreme leader Ayatollah Ali Khamenei on Thursday warned during talks with President Michel Suleiman in Tehran that “some foreigners are trying to export some of the problems in the region to Lebanon,” noting that such attempts can be foiled by “depending on the Resistance.”

“Some foreigners are trying to export some of the problems in the region to Lebanon, but the Lebanese groups and sects can foil such attempts by depending on the Resistance,” Iran’s news agency IRNA quoted Khamenei as telling Suleiman during a meeting on the sidelines of the Non-Aligned Movement summit hosted by Tehran.