An Israeli settler is killed by Palestinian police near a holy site, sparking new tensions. His aunt, an Israeli cabinet minister, says he was killed by a terrorist disguised as a police officer, but an investigation shows the group tried to break through a Palestinian roadblock. Settlers say they go there every night without Palestinian permission. PM Netanyahu calls the incident, which is in the context of an uptick in violence, “heinous.” The New York Times says Pres. Obama must present a peace plan. Israel’s West Bank separation barrier creates psychological divisions as well as physical ones. An Israeli IT company hires Palestinian programmers. Egypt closes the crossing with Gaza for the holidays. PM Fayyad says national unity is crucial for statehood and that Palestinians will soon celebrate Easter in East Jerusalem. Efforts to resume negotiations are underway, and a PLO official says they may not approach the UN if serious talks resume. Israeli officials say Hamas may want to capture more Israeli soldiers. Alon Ben-Meir says Israel must make the next diplomatic move. David Rosenberg says Palestinian leaders are creating their state and this is good for Israel. Gary Younge says the status quo is neither sustainable nor desirable for Israelis or Palestinians. Elliot Jager looks at the history of the Likud party. Tony Karon says the UN is the right place for Middle East diplomacy. Fawaz Turki says there is an intolerant streak in Palestinian society that must be challenged. Musa Keilani says unless something significant happens before September, the UNGA will recognize Palestine. Dan Ephron profiles Pres. Abbas in Newsweek.