Tel Aviv stocks have started Tuesday with a negative bias. As Wall Street was closed Monday for Labor Day, all eyes are fixed on Europe's markets.

Turnover is thin as the slow escalation on hostilities sent most investors back to the fence, waiting for a market trend to develop. Meanwhile, the talk of the floor today is

United Mizrahi Bank (TASE:

MZRH

), the country's fourth largest bank, on news that the Italian insurance giant Generali has resumed talks to buy a controlling interest from the Ofer brothers. Through a spokesperson, the Ofer brothers deny intentions to sell.

Mizrahi stock is up 1.6% at opening.

Anyway, the Maof-25 index is down 0.1%, the Tel Aviv-100 index is unchanged and the TelTech-15 index is inching up by 0.2%.

Mizrahi aside, the banks are still the story. Moody's has said it sees no room for Israel's small banks, which should be swallowed up by the big ones. One much mammoth is

Bank Leumi (TASE:

LUMI

), which has been hitting the headlines by virtue of its horrible report for the second quarter of 2002. Its stock is down 0.7% today, after wavering up and down in the last couple of days on massive selling by employees whose shares were released from lockup on Sunday. Somebody's picking up the shares, that's for sure.

One banking minnow is

Union Bank of Israel (TASE:

UNON

). Turnover in its shares has been uncharacteristically heavy in recent days, as is so again this Tuesday morning.

Discount Investment Corporation (TASE:

DISI

) is flat this morning, though it is expected to take a beating due to the reorganization at its affiliated company Cellcom. While the ultimate goal is to improve operations at the cellular operator, the moves also mean that it will be setting aside sums for early retirement compensation, which will impact on Discount Investment Corporation.