NEWS: An Israeli court orders the release of Palestinian protest leader Bassem al-Tamimi. IDF Chief of Staff Gantz says Iran's leaders are rational actors and will respond to international pressure not to build a nuclear weapon. New Kadima leader Mofaz warns that without peace with the Palestinians, Israel is bound to become a binational, and not a Jewish, state. The natural gas dispute between Israel and Egypt reflects significant changes in their relationship since the overthrow of former Pres. Mubarak. The National looks at the political implications of the controversy. While Israeli officials have been downplaying the dispute, the Israeli media sees it as extremely ominous. The United States says Israel's recognition of “unauthorized” outposts is “unhelpful” and that the US doesn't "accept the legitimacy of continued settlement activity.” UNSG Ban also says he is “deeply troubled” by increased settlement activity, including outposts. Israel's navy arrests Gaza fishermen. Airports in Scandinavia are prohibiting Israeli airlines' security procedures based on profiling. Conditions for Palestinian refugees in Lebanon are reportedly deteriorating. COMMENTARY: Paul Krugman says "the narrow-minded policies of the current [Israeli] government are basically a gradual, long-run form of national suicide." Avraham Burg says Israel needs a constitution. Doron Rosenblum says Israeli hasbara can't hide the ugliness of the effects of some of its policies. Bradley Burston says the best way to celebrate this Israeli Independence Day is to buy Palestinian products. CNN interviews PM Netanyahu. The Jerusalem Post interviews Pres. Peres. The Forward reviews a new novel illustrating the complexities of identity for Palestinian citizens of Israel. Leah Koenig explains why she had good reasons for opposing a boycott of all Israeli products at her New York food co-op. Osama Al Sharif asks if it's too late to save Arab East Jerusalem. Daniel Levy says it's actually Benny Morris, not the Palestinians, who clings to absolutist rejectionism.