Both the Times and the Telegraph report claims by an exiled Iranian opposition group that the Tehran regime is constructing a new nuclear site in mountain tunnels north of the capital. The National Council of Resistance of Iran (NCRI) has in the past exposed nuclear-related installations such as the uranium enrichment facility at Natanz and the heavy water reactor at Arak, but has also made inaccurate claims. Meanwhile, the Times also reports that three peers have called for the UK to restore full diplomatic relations with Iran in the wake of the election of new President Hassan Rowhani.

The online edition of the Financial Times says that the IDF will establish a new regional division on the Golan Heights as part of a new plan to streamline its forces, given growing concerns about the threat of instability and possible Hezbollah action on the Syria border. In Syria itself, the Times reports that opposition forces are readying to abandon the city of Homs, which is apparently expected to fall within the coming days to President Assad’s forces, supported by Hezbollah.

Meanwhile, the Guardian covers claims that Israel has anonymously imprisoned a second ‘Prisoner X’ following revelations earlier this year over the similar incarceration of Ben Zygier. The report quotes Israel’s Public Security Minister Yitzhak Aharonovitch who said that there are no disappeared prisoners in Israel and that legal procedures are followed meticulously in cases where identities cannot be publicised for national security reasons.

The Independent reports that Palestinian faction Fatah is planning to hold a memorial ceremony for the veteran high-ranking Israeli member of the Palestine Liberation Organisation (PLO), Ilan Halevi who died this week.

The Telegraph says that the United States will complete a deal to deliver four new F16 fighter jets to Egypt, despite the intervention of the country’s military which brought about the downfall of Mohammed Morsi last week. In a commentary piece critical of US Middle Easy policy, Con Coughlin writes in the Telegraph that reports Saudi Arabia is directing missiles towards Israel is an indictment of the Obama administration’s failure in the region.

In the Israeli media this morning, several publications, most prominently Sof Hashavua report comments made by Defence Minister Moshe Ya’alon in support of the IDF’s plan to streamline and cut costs over the next five years. However, Yediot Ahronot’s military affairs correspondent Yossi Yehoshua argues that the changes are potentially too large and too fast and should be made over decades, not several years.

Meanwhile, Israel Hayom and Israel Radio news say that Ya’alon is considering deferring the enlistment of thousands of ultra-Orthodox students scheduled to be drafted into the IDF in August. Draft papers had been issued following the expiration of the Tal Law last summer, an arrangement which effectively exempted the vast majority of ultra-Orthodox from military service. However, Ya’alon is apparently keen to postpone a comprehensive ultra-Orthodox draft in August, as it would not comply with the recommendations of a bill under discussion, proposed by a ministerial committee charged with creating a more equal enlistment, headed by Science and Technology Minister Yaakov Peri. In a related item, Yediot Ahronot reports that a second ultra-Orthodox soldier this week has been attacked by members of the ultra-Orthodox community in Jerusalem in what is being widely viewed as a campaign of intimidation against enlistment within the ultra-Orthodox community.