Tel Aviv stocks are losing 1% at mid-morning trade on Sunday following the escalation in hostilities between Israelis and Palestinians over the weekend.

Israeli jets pounded targets in the Palestinian territories on Saturday after a suicide bomber killed 6 and wounded over 100 people at an attack on a shopping mall in central Netanya. Palestinian sources say the jet attack killed 10 people and wounded 50.

The Maof-25 index of blue chips is sliding by 1.53% to 422.37 points and the TA-100 index is down 1.33% to 414.20 points. Technology stocks are down 1.59%. Total turnover as of writing is a razor-thin NIS 25 million.

Dual-listed shares opened on negative arbitrage gaps and are losing ground. Teva Pharmaceuticals (Nasdaq:TEVA) is dropping 2.5% on hefty turnover of NIS 3.2 million. The shares opened on a high negative arbitrage gap of 2.9%. Nice Systems (Nasdaq:NICE) is sliding 2.8% and Elron Electronic Industries (Nasdaq:ELRN) is dropping 2.6%.

New Applicom, a member of the Formula Systems (Nasdaq:FORTY) group, is diving 5.8%. The company today announced that it will be writing off $6 million in the first quarter 2001 in respect of an investment in Net Quotient Consulting Group. The company added that its subsidiary Comsoft will be itself striking off $1.2 million in respect of an investment in Xtivia.

For the fourth quarter of 2000, New Applicom posted a record profit of NIS 6.9 million. Its profit for the year climbed to NIS 19.4 million. It doesn't look like New Applicom will be able to repeat that feat this year.

Formula Systems (Nasdaq:FORTY) is down 2.7% on a negative arbitrage gap of 1.4%, after its subsidiary Mashov Computers reported weak results for the first quarter of 2001.

Mashov's revenues declined to NIS 99.8 million, 4% below the parallel quarter of 2000. It reverted to a loss of NIS 19.9 million, compared with a profit of NIS 115.2 million in the first quarter of 2000. Mashov is plunging 8%.

Phone company Bezeq is down 1.9% on NIS 1.2 million turnover after skipping 5.7% last Thursday on high turnover. The climb followed the announcement of Prime Minister Ariel Sharon to convene a committee in two weeks to discuss Bezeq's privatization.

Bank Hapoalim is down 1.3%, Bank Leumi is down 1.2%, and Mizrahi Bank is dropping by 1.9%. Tomorrow shares held by Bank Leumi workers end their lock-up period. Next week shares held by workers of Mizrahi Bank end their lock-up period.