Coverage continues to focus on the US-Israel settlement controversy: the US may be rethinking negotiation plans; the New York Times says the administration see an opportunity; Israel rejects US demands to limit construction in Jerusalem, but reports suggest an unannounced freeze may be imminent; Pres. Obama and Israeli Amb. Michael Oren both say there is not a crisis; Mustafa Barghouti says Palestinians should not stay on the sidelines; the Christian Science Monitor says the US must keep up the pressure; a Ha'aretz commentary says Israel needs tough love; Arabs say hopes in Obama are dwindling; Osman Mirghani says Arabs should take advantage of this opening; Francis Matthew says the issue is not just future building but existing settlements. The Forward looks of assertions that Israel's policies are threatening US interests. A rocket fired from Gaza kills a Thai worker in southern Israel, among claims of responsibility include an Al Qaeda-like organization. The first planned Palestinian city in the West Bank gets a US government grant. A Ha'aretz editorial says Israel's closure of West Bank nonviolent protest villages is an attack on free speech. Ali Jarbawi says the PA state and institution building program shows Palestinians are serious.