ISRAEL launched massive bombing assaults on Hamas targets in Gaza in retaliation for attacks on Israeli towns within reach of rockets launched from Gaza. After several days the death toll in Gaza was about 400 with thousands injured. Medical supplies were in short supply following restrictions at border crossings into Gaza controlled by Israel. In Israel casualties were few although in the areas affected by the rockets anticipation was continuous. There was also anxiety that Israel's nuclear plant at Dinona might be within range. Several proposals for a ceasefire were put forward but without any positive response from either side. After almost a week of aerial attack Israel was thought to be considering whether to authorise an army incursion into Gaza. Hamas remained obdurate.
The Czech Republic took over the rotational Presidency of the European Union from France for six months. However, the French President Nicolas Sarkozy seemed reluctant to relinquish his leading role and continued to take initiatives in relation to the Middle East conflict and reform of global financial systems.
In Britain successful athletes at the Beijing Olympics were recognised in the Queen's New Year Honours with awards ranging from a knighthood to the more humble MBE.