This same story broke about a year and a half ago:
http://bsimmons.wordpress.com/2007/01/31/the-obama-muslim-shell-game-catholic-school-docs-show-obama-registered-as-muslim/http://www.cnn.com/2007/POLITICS/01/22/obama.madrassa/The fact that some Israeli Likudniks are regurgitating it and presenting it as news does not mean it's new information.
Also, I've noticed that in many of the smear e-mails, both Barack Obama Sr. and Lolo Soetoro are referred to as "radical Muslims." While Barack Sr. might have been a Muslim in his youth, he was an atheist by the time he met Stanley Ann Dunham. Moreover, he walked out on the family when Barack Jr. was two years old, so Barack Obama never knew his father and was not raised by him. Islam is not some sort of genetic disease that is inherited.
Lolo Soetoro was also not a radical Muslim. The fact he was willing to marry a white American atheist seems to make this clear by itself. "radical Islam" as we now think of it was rare in Indonesia in the 1960s, and in fact is still relatively rare there today. Generally, Southeast Asian Islam has been far less strict and more open to coexistence with other faiths than Islam in the Arab World. Also, Lolo died of a liver disease caused by his excessive drinking, and alcohol is explicitly forbidden by Islamic law.
