• Charlotte Higgins: Art doyenne's lobbying link

Most followers of contemporary art in this country will know of Anita Zabludowicz: she is a voracious collector who has recently opened a public exhibition space in London, called 176; her yacht is a regular sight moored near the Giardini during the Venice Biennale; and she is a frequent mingler on the British art scene (last spotted by the Diary as she sized up a David Altmejd sculpture with his dealers at the Liverpool Biennial this autumn). But how many art lovers are aware of the activities of her husband, the Finnish born billionaire Poju Zabludowicz? Mr Z, heir to an arms-dealing fortune, is the chairman and a major donor of the British Israel Communication and Research Centre. That body is a fantastically active and well-connected lobbying outfit that has been working behind the scenes during the current crisis in Gaza, organising press briefings and interviews with high-level Israeli officials in an attempt to push the Israeli case with British journalists.

  • Dispute drives wholesale gas prices sharply higher

Wholesale gas prices rose sharply yesterday as the cold snap continued to drive British demand higher.

Analysts played down the immediate impact of the row between Russia and Ukraine but said if it dragged on there could be an impact on the price of gas coming into the UK. Britain imports little gas directly from Russia, relying heavily on North Sea and Norwegian supplies, but imports some gas from continental Europe which takes substantial quantities of gas from Russia.

"The UK is not experiencing any supply shortfall at the moment," said Andrew Horstead, research manager at Utilyx. "Prices are reacting to the cold weather and the pick up in demand. The market is taking a rather cautious approach to see how far the (Russia/Ukraine dispute) escalates. If the situation continued for the next week or 10 days it could start to have implications for the UK."

Problems could arise if the dispute dragged on and countries held on to supplies rather than exporting to the UK. The UK has less gas storage capacity than some European countries, making it more vulnerable to reduced gas flow.

The Department for Energy and Climate Change urged Moscow and Kiev to resolve their differences.

"We back the European Union's call for gas supplies to be restored immediately and that both parties restart negotiations with a view to a speedy resolution of this commercial dispute," the department said.

"We do not expect this dispute to impact UK supplies because the UK has diverse sources of gas supply which means we are not reliant on any single supplier. We import less than 2% of our gas from Russia and can replace this from other sources if we need to."

Yesterday gas prices for same-day delivery rose 8p to about 69p a therm, while gas for delivery on Wednesday rose by more than 12p a therm to 73p.

Short-term wholesale power prices have also risen in recent days. British Energy units have suffered several unplanned disruptions but are expected either to be back in service imminently or are already back on line.

The price movements are unlikely to have an immediate effect on energy suppliers' judgments about future retail prices. Scottish Power's decision to launch a fixed price gas tariff on Monday at a 10% discount to the standard price is seen as a hint about the likely movement of prices for residential customers.

But there is likely to be concern that if the Russia/Ukraine dispute continues and has a more lasting impact on wholesale prices in the UK that could make the companies, which are looking for a sustained fall in wholesale prices, more cautious in their approach.

  • Jonathan Freedland: Gaza after a Hamas rout will be an even greater threat to Israel

The scenes of calamity just get worse. Yesterday Guardian readers awoke to an image that will haunt many for years to come: three young children, their eyes closed as if in sleep, laid out dead on a hospital floor. One was no bigger than a baby; next to him, a toddler wearing junior tracksuit trousers, the kind your own son might wear. Except these were dyed red with blood.

Somehow, and quickly, even that horror was surpassed with the news yesterday that a UN school, used as a shelter, had been hit, killing more than 40 Palestinians, more than half of them women or children. Israel says Hamas fighters were launching mortar shells from the UN facility, which is why Israel hit back. Either way, Operation Cast Lead seems designed to leaden the heart with sorrow.

Still, Britons and Americans have no cause for self-righteousness. The scale of the Israeli offensive is shocking, and yet the killing is not of a greater order than that of the two wars, in Iraq and Afghanistan, in which our very own British troops are taking part. I spoke yesterday with one foreign diplomat based in Jerusalem who recalled how, during an earlier posting in Afghanistan, he had seen the remains of an entire village razed to the ground by American fighter jets in pursuit of a couple of Taliban commanders. "All that was left was rubble and body parts," he says now. Seen in the context of the last seven years, the grim truth is that Israelis are not guilty of a unique crime in Gaza.

When and how will this end? "The sooner, the better," says Ehud Olmert, the accidental prime minister whose tenure began with the pounding of southern Lebanon and will end with the pummelling of Gaza. He told Ha'aretz last night he is in touch with world leaders seeking a diplomatic way out - but he did not sound like a man in a hurry.

The conventional wisdom suggests crises like this conclude when the international community finally says enough is enough. But in the Middle East, the international community is a fiction. The only pressure that counts is Washington's and nothing is coming from that direction. George Bush fully endorses Israel's action and Barack Obama is sticking to the protocol that a president-elect keeps his mouth shut till he has sworn the oath on January 20.

That leaves the only pressure that can divert Israeli governments: Israeli public opinion. If the fathers and mothers of Israel's soldiers turn on this operation, then its days will be numbered. For that to happen, the Israel Defence Forces would have to sustain serious casualties. Support for the 2006 war in Lebanon melted once too many Israeli families were burying their dead.

But that does not seem to be about to happen. For one thing, the IDF is currently winning plaudits from the Israeli press for proceeding gingerly, pushing its ground troops forward with caution as if they have learned some of the operational lessons of 2006. More importantly, Hamas is not staging anything like the opposition mounted by Hezbollah in Lebanon, when Israeli fatalities reached triple figures.

It lacks the resources of Hezbollah, with its open border and supply lines to Syria. Hamas is in tiny, sealed-off Gaza. True, it is backed by Iran - which partly explains the strength of support for Cast Lead from an Israeli public long fearful of an Iranian proxy on its southern border - but relying on smuggled kit is not the same as having a powerful patron across the border.

Unless, of course, this is all a fiendish plot by the Hamas leadership. On this theory, they are not really cowering in their underground bunkers - too scared to resist, saving their own skins, as the uncle of those dead toddlers accusingly told the Guardian yesterday. Instead they are waiting to lure the IDF in, enticing Israeli troops deep into Gaza's cities where they will be most vulnerable. But in the absence of such a lethal Hamas fightback, the ending of this conflict will be in Israel's hands. The Israelis won't end it now, not when they are still finding weapons caches or other Hamas military capacity to be degraded. It is too tempting to press on, to crush the enemy. That way Israel gets to claim what it could not in 2006: a clear and total victory.

But there is a massive risk here. Such a victory will not just achieve Cast Lead's original stated aim, namely altering Hamas's calculus - reducing its incentive to fire rockets at civilian targets inside Israel - but could topple the Hamas government altogether.

Israeli officials deny that regime change in Gaza is either likely to happen or the goal of their mission. But that may end up being the result: intelligence reports suggest the organisation has been eviscerated, its ability to govern all but destroyed.

Israeli leaders will crow at that; their poll numbers will surge. But it will surely prove a pyrrhic victory. For what would be the consequences of crippling the Hamas administration in Gaza? Israel would be confronted with a sharp dilemma. Either it would have to stay, resuming the occupation it sought to end in 2005 - a notion with zero popular appeal in Israel. Or it would have to withdraw, leaving behind a huge and dangerous question mark.

For Gaza could become a vacuum, rapidly descending into Somalia, a lawless badland of warlords and clans. A new force could seek to replace Hamas. Most likely it would be even more radical: al-Qaida has long been pushing at the edges of Gaza, eager to find a way in.

Would either of those options appeal to Israel? Of course they wouldn't. As one Israeli commentator put it yesterday: "In this context the IDF is afraid of being too successful."

Israel's preferred scenario, having pushed Hamas out of the way, is for the pro-western moderates of Fatah to take over. But Fatah knows that to return to Gaza on the back of an Israeli tank is the kiss of death: they would for ever be branded collaborators with the enemy.

Israel may try to dump responsibility for Gaza on a coalition of moderate Arab states and others, including the Fatah-led Palestinian Authority. But would any of them be willing to take it on? Analyst Ahmad Khalidi notes that the "amount of aid, reconstruction and psychological nursing is of such intensity" that surely no one would step in. Israel may be left recalling what Colin Powell once called the Pottery Barn rule: "You break it, you own it".

And from the rubble of Gaza, the attacks on Israel will surely resume. Hamas is too deeply rooted to disappear. New cells will arise, more filled with hatred and bent on revenge than ever. Already there are warnings of a return to suicide bombing, inside Israel and beyond. And, warns Khalidi, there would be no Hamas leadership - with undeniable discipline over its forces and the pragmatism to see the benefits of a ceasefire - to rein in these new, angry fighters. The great irony is that Israel may well decapitate Hamas - only to regret the passing of a Palestinian administration with sufficient stature to bring order.

Perhaps Israel's leadership will see this danger and hold back, pushing for a ceasefire that would be robust and externally supervised but would ultimately, if indirectly, amount to a deal with Hamas. If that is the outcome, it will be a strange kind of victory. For Israel could have got that through diplomacy, without causing the death, mayhem and damage to its international reputation now unfolding before our eyes. If it goes further, it will have removed one danger - only to have replaced it with one far greater.

freedland@guardian.co.uk

? This article will be open to comments on January 7 from 09:00 GMT

  • The life of Ernest Hemingway

A roving writer's life: Ernest Hemingway was born in 1899 in middle-class Illinois, the son of a doctor

  • Mark Almond: A capitalist revolution

Russia's energy giant, Gazprom, is at the heart of a new cold war pitting the Kremlin against Washington. In the old cold war, Soviet gas still flowed west at the height of rows between Reagan and Brezhnev - but postcommunist Russia is proving less pliant than the "evil empire".

Gazprom is at the heart of modern Russia. Its former chairman is the country's president, and many key executives work part-time in the Kremlin. It is, above all, not only Russia's biggest company but the world's biggest energy supplier. Back in the sleepy Brezhnev days it was run like the gas board here under Harold Wilson, and with as much geopolitical significance. Now the west's fear is that Gazprom is beginning to play a role like that of America's oil companies or BP in the days when the west's energy interests determined who ran countries such as Iran.

Gazprom's dispute with Ukraine is multilayered. The west prefers to focus on the strategic significance of Russia's desolate neighbour, while the Russians put money first. It makes sense for Washington to see the issue solely in great power terms because America doesn't depend on Gazprom like the EU.

Last month, in the dying days of the Bush administration, Kiev signed a "strategic partnership" with Washington. Keeping Russia hemmed in is why Ukraine matters to America. Apart from its status as a geopolitical pawn, Ukraine is little more than a pipeline route for Gazprom's exports.

Washington's indignation about a Russian energy oligarch sitting in the Kremlin does not extend to Ukraine's energy oligarch, Yulia Tymoshenko, sitting as prime minister in Kiev. Qualifying as a market economy used to be about buying cheap and selling dear, but now politics trumps economics in western estimations.

Although its EU allies pay around $500 per unit, Washington wants Gazprom to subsidise the anti-Russian coalition government in Kiev by charging the poor Ukrainians only $175. Gazprom's response is market economics red in tooth and claw.

The west wanted Russia to be a market economy, but Russia never asked how countries become market economies. Is a political-economic juggernaut like Gazprom just a relic of Soviet days? Didn't so-called chartered companies - monopolies in effect - like the East India or Hudson Bay companies play a huge role in the development of Britain's model market economy? Without their protected profits and ability to call on Westminster to back up their trading practices with power, would Britain's economy have taken off 300 years ago?

This spat at the gas tap has hit western Europe, but the region is yesterday's growth market so far as Gazprom is concerned. Apart from Britain, where the blinkered market-makers set free by Tony Blair failed to anticipate demand, let alone invest to meet it, there are no new importers from Russia in the EU.

New pipelines via the Baltic to Germany and through the Balkans to Italy are primarily to cut out the risk of destitute ex-Communist states "doing a Ukraine" and siphoning off unpaid gas while demanding their rich EU partners stick up for them in Moscow.

Gazprom is looking for new clients, and US policy helps. American sanctions on Iran suit Russia well; Washington has pressed Turkey not to buy gas from Iran, so Gazprom offers the alternative. Chaos in Afghanistan has hit the prospect of a pipeline from Turkmenistan to India - which, with Japan and above all China, is tomorrow's market for Gazprom. While western Europe sweats over whether to pressure Ukraine to pay so Russian gas can flow, or to fight Washington's new cold war by proxy, Moscow is building new routes east and south. Medvedev announced a new pipeline to China on entering the Kremlin.

Western triumphalists marked Russia down for inevitable decline. Certainly so long as Yeltsin let his crony capitalists plunder the country and deposit the loot in London and New York, pessimism was justified. Now, however, Russia's capitalist crew are not fly-by-night asset-strippers but ruthless capitalist politician-businessmen of the sort Britain used to produce.

Gazprom's executives are the 21st-century equivalent of Britain's 18th-century pioneers of unscrupulous national power and wealth. Suddenly, yesterday's proponents of the unbridled free market have discovered a distaste for the brute realities of supply and demand. Rather like poker players who have won all the chips on the table, western states recognise that the odds will turn sharply against them, so they insist on the economic equivalent of a whist drive. But will the hard young men running Gazprom take up this granny's game?

? Mark Almond is a history lecturer at Oriel College, Oxford
mpalmond@aol.com

  • Nick Clegg: We must stop arming Israel

The world watched in horror yesterday as the conflict in Gaza claimed its latest innocent victims in the rubble of a UN school. Any hopes of reconciliation are being snuffed out as anger spills into protests around the world.

The past two weeks have been a telling indictment of the international community. We have an outgoing US president sanctioning Israel's military response and an aching silence from the president-elect. We have a European Union encumbered by clumsy decision-making and confused messages.

And at home we have a prime minister talking like an accountant about aid earmarked for Gaza without once saying anything meaningful about the conflict's origins. Gordon Brown, like Tony Blair, has made British foreign policy effectively subservient to Washington. But waiting for a change of heart in Washington is intolerable given the human cost.

Of course, Israel has every right to defend itself. It is difficult to imagine what it must be like to live with the constant threat of rocket attacks from a movement which espouses terrorist violence and denies Israel's right to exist. But Israel's approach is self-defeating: the overwhelming use of force, the unacceptable loss of civilian lives, is radicalising moderate opinion among Palestinians and throughout the Arab world. Anger in the West Bank will make it virtually impossible for Mahmoud Abbas, the Palestinian Authority president, to continue to talk to Israeli ministers.

Brown must stop sitting on his hands. He must condemn unambiguously Israel's tactics, just as he has rightly condemned Hamas's rocket attacks. Then he must lead the EU into using its economic and diplomatic leverage in the region to broker peace. The EU is by far Israel's biggest export market, and by far the biggest donor to the Palestinians. It must immediately suspend the proposed new cooperation agreement with Israel until things change in Gaza, and apply tough conditions on any long-term assistance to the Palestinian community.

Brown must also halt Britain's arms exports to Israel, and persuade our EU counterparts to do the same. The government's own figures show Britain is selling more and more weapons to Israel, despite the questions about the country's use of force. In 2007, our government approved £6m of arms exports. In 2008, it licensed sales 12 times as fast: £20m in the first three months alone.

There is a strong case that, given the Gaza conflict, any military exports contravene EU licensing criteria. Reports, though denied, that Israel is using illegal cluster munitions and white phosphorus should heighten our caution. I want an immediate suspension of all arms exports from the EU, but if that cannot be secured, Brown must act unilaterally.

Finally, the world's leaders must accept that their response to the election of Hamas has been a strategic failure. The removal of the EU presence on the Egypt border in response to Hamas's election, for example, has made it easier for the rockets being fired at Israel to get into Gaza in the first place. An EU mission with a serious mandate and backing from Egypt and Israel would help Israel deal proportionately and effectively with the threat from weapons smuggling.

Attempts to divide and rule the Palestinians by isolating and punishing Gaza will not succeed. To secure peace in the Middle East, Hamas must turn its back on terrorism, and help create Palestinian unity. Only unified leadership in the West Bank and Gaza can offer Israel the security guarantees that it rightly seeks.

My proposals to stay Israel's hand in this conflict may be unwelcome to some, but they have the country's long term interest at heart. No terrorist organisation has ever been defeated by bombs alone. Only a new approach will secure lasting peace for Israel itself.

? Nick Clegg is the Liberal Democrat leader cleggn@parliament.uk

? This article will be open to comments on January 7 from 09:00 GMT

  • New book reveals the many forms of the snow crystal

Leading snow crystal scientist publishes book in bid to persuade the world that no two flakes are exactly alike

  • Editorial: No shelter as Israel bomb Jabalya refugee camp

Editorial: The horror of Qana was revisited on Gaza

  • Obituary: Ann Savage

'I turned around to look at her. She was facing straight ahead, so I couldn't see her eyes. She was young - not more than 24. Man, she looked like she had been thrown off the crummiest freight train in the world! Yet in spite of that, I got the impression of beauty, not the beauty of a movie actress, mind you, or the beauty you dream about with your wife, but a natural beauty, a beauty that's almost homely, because it's so real." This is the description of Vera when first seen by the luckless anti-hero (Tom Neal) of Edgar G Ulmer's Detour (1945). Vera, one of the most hellish femmes fatales in the history of the cinema, was the benchmark role of Ann Savage, who has died aged 87.

Unlike the usual manipulative, glamorous heroines of noir, Savage, as the bitter, blackmailing hitchhiker, does not use her sex appeal. She makes her first appearance a full 32 minutes into Detour, a manic cinematic night ride, a fatalistic drama of sex and money, and one of the bleakest of films noirs. "I wasn't aware of the term 'film noir' until the 70s," Savage commented later in life. "I read up on it. It was a revelation to me when I learned Detour was a film noir ... I was very young and ignorant of the facts. I only worked three-and-a-half days on the movie, though that was more than half the time it took to shoot."

Born Bernice Maxine Lyon in Columbia, South Carolina, she was taken to Los Angeles by her widowed mother, a jewellery buyer, while still a child. In her teens, she trained at Max Reinhardt's acting school. The school's manager was Bert D'Armand, who later became her agent and subsequently her second husband in 1945. (She had been married briefly when she was 18.)

She changed her name to Ann Savage for a workshop production of Clifford Odets's Golden Boy that led to a contract at Columbia Pictures. Despite resisting the studio boss Harry Cohn's sexual advances, she was put to work on 11 films in 1943, many of which were part of the entertaining B-films being run by the studio - in series such as Lone Wolf (One Dangerous Night, Passport to Suez), Boston Blackie (After Midnight With Boston Blackie) and Blondie (Footlight Glamour). Also in the same year, she appeared in Two Señoritas from Chicago, Saddles and Sagebrush, Dangerous Blondes and Klondike Kate, the latter being the first of four films in which she co-starred with Neal, her partner in crime in Detour. Their off-screen relationship, however, was said to be chilly. Except for Passport to Suez, opposite the unjustly forgotten Warren William, where she played a femme fatale, she was all sweetness and light. She had little respect for such roles, however: "They were mindless," she said in 1985. "The actresses were just scenery. The stories all revolved around the male actors; they really had the choice roles. All the actresses had to do was to look lovely, since the dialogue was ridiculous."

She gradually began to get feistier roles in 1944, such as Two-Man Submarine and The Unwritten Code, in which she and Neal fought the Nazis, though nothing prepared audiences for Detour the following year. "My first scene was in the car," she recalled. "I read the lines and Edgar Ulmer corrected the tempo, and that was the last bit of coaching he gave me. He had given me the key, which was the tempo. It was difficult to speak that quickly, but it helped give the character her craziness - it was just right. I didn't see the rushes, so I had no idea I was coming over as hard as I was." She had been startled, she said, by how unkempt they wanted her to look: "I had just come off a lot that kept me looking absolutely perfect. But Vera was not a pretty woman. She was maniacal. Edgar objected to my hair looking so neat and had the hairdresser run cold cream through it to make it streaky and stringy. "

Detour was made by Producers Releasing Corporation (PRC), the most notorious Poverty Row film company, as was Apology for Murder (1945), which Savage called "an out-and-out cloning of Double Indemnity". Certainly the plot of this cheap 67-minute B-movie bore a striking resemblance to Billy Wilder's 1944 classic. As Savage herself admitted, "I'm certainly no Barbara Stanwyck," but it was reasonably gripping and, as usual, she was a hypnotic presence on screen. However, Paramount, the producers of Double Indemnity, got it pulled after two days, and the film languished unseen for some years.

For the next eight years, Savage appeared in several negligible productions, in which she sparkled in shoddy settings. Apart from a few parts on television, she retired following The Woman They Almost Lynched in 1953, when she had moved down the casting list. Following her husband's death in 1969, she taught herself law by working as an attorney's clerk and also learned to fly a plane. Savage returned to the big screen after a 33-year absence, playing a nun in Fire With Fire (1986). Then, when she was 86, the Canadian director Guy Maddin cast her in My Winnipeg (2007). According to Maddin: "We finished the script for My Winnipeg, a plunge back into the mythically inchoate days of my own - and my city's - childhood. These were days lived completely under the dominion of a fearsome maternal titan, years trembled out beneath the scented fist of my mother's gorgeous and glamorous dictatorship, and I knew there was only one person alive, who had ever lived, who could play her role: Ann Savage."

? Ann Savage (Bernice Maxine Lyon), actor, born 19 February 1921; died 25 December 2008

  • Barack Obama 'picks CNN medical reporter as surgeon general'

Presidentelect Barack Obama wants CNN medical correspondent Sanjay Gupta to be his surgeon general and serve as chief overseer of Americans' health the network has reported.

  • Woman dies after contracting rabies in African animal sanctuary

A woman who contracted rabies while working in an African animal sanctuary has become the first Briton to die from the virus for four years.

  • Blackwater guards plead not guilty to Iraqi murders

Five former guards from US security firm Blackwater Worldwide a government contractor in Iraq have pleaded not guilty to killing 14 Iraqi civilians and wounding 18 others by gunfire and grenades at a busy Baghdad intersection in 2007.

  • Loch Ness Grand Canyon and Mount Everest in 'Wonders of Nature' vote

Loch Ness to vie with the Grand Canyon the Great Barrier Reef and Mount Everest to be named one of the New Seven Wonders of Nature organisers have said.

  • Boy 6 takes family car after missing bus

Having missed his bus a 6yearold boy tried to drive to school in his family's sedan and crashed.