The US, UN and others condemn Israel’s eviction of nine Palestinian families from their homes in East Jerusalem. The Obama administration plans a public relations campaign in Israel and Arab countries to rally support for the peace process. Israeli Foreign Minister Avigdor Lieberman is facing indictment on bribery and fraud charges. As Israel eases restrictions on movement and trade in the West Bank, signs of economic growth in the area are beginning to emerge. Israeli human rights groups protest against pressure from the Netanyahu government. The Speaker of the Knesset acknowledges that the establishment of the Israeli state was “a real trauma for the Palestinians.”

The New York Times, LA Times, the Economist, and Patrick Seale in the Gulf News all praise President Obama’s Middle East peace initiative and encourage him to continue to pursue an Israeli settlement freeze. The Wall Street Journal outlines Hamas’ present policies. As Israeli human rights groups challenge settlement activity in courts and seek an end to US federal tax exemptions for donations to settlements, the Israeli government considers banning foreign donations to “subversive” NGOs. Ha’aretz profiles the role of White House chief of staff Rahm Emanuel, and reports on the first Palestinian “planned city” in the West Bank. Asharq Al-Awsat reports on Arab foreign ministers’ conditions for normalization steps in response to a potential Israeli settlement freeze, while Zuheir Kseibati in Al-Hayat warns against such steps.

The New York Times reports that Israeli settlers disparage President Obama using “an insulting Hebrew slang for a black man and the phrase ‘that Arab they call a president.’” Another Israeli settler complains in the LA Times that the State Department still uses the term “West Bank” to describe the West Bank. Several commentaries touch on growing skepticism, especially among Arabs, that President Obama can broker progress on peace. The Washington Post continues its campaign of criticism against President Obama’s efforts to secure an Israeli settlement freeze. Senior Fatah official Abu Maher Ghneim to the West Bank after 40 years in exile in Tunisia. Saudi Arabia says Israel is “not serious about peace,” but the National argues that Arabs should take steps to support President Obama’s peace initiative.

In an interview with the Middle East Bulletin, Palestinian journalist Taghreed El-Khoudary describes the current situation in the Gaza Strip as “very depressing.” The UN again calls for easing of Gaza blockade in order to help rebuild Palestinian schools. In the midst of ongoing settlement construction, frustration mounts over continued Israeli resistance to calls for a settlement freeze, including from Israeli commentators. The Israeli organization Peace Now launches an ad campaign saying that the occupation threatens the survival of Israel. The US requests greater cooperation from the Arab states on the peace process, particularly a willingness for diplomatic overtures towards Israel in response to a potential settlement freeze. Factional tensions rise between the Palestinians ahead of Fatah’s first party congress in two decades.

Defense Secretary Robert Gates visits Jerusalem in an effort to diffuse tensions over Israel’s policies toward Iran. Meanwhile, US envoy George Mitchell meets with Israeli Prime Minister Netanyahu, then with Palestinian President Abbas, to discuss the peace process, declaring that “everyone must take steps, some of them difficult, some of them controversial.” Prominent American Jewish leaders speak out about their July 13 meeting with President Obama. In Congress, Reps. Brad Sherman (D-Calif.) and Ed Royce (D-Calif.)are soliciting signatories to a letter to the Saudi king asking him to “step forward with a dramatic gesture toward Israel.” As the IDF refutes claims that it is planning to evacuate outposts in the West Bank, settler activists announce their intent to build 11 more.

Shas spiritual leader Rabbi Ovadia Yosef denounces President Obama's efforts to secure a settlement freeze, saying "We are being ruled by slaves," and that, "Our messiah will come and throw them out." (8).The New York Times profiles two ultra-Orthodox Israeli settlements that show signs for potential compromise with Palestine (1). Special Mideast envoy George Mitchell meets with Syrian leadership before heading to Israel (2) (4) (16). Gaza’s top Hamas-appointed judge orders all female lawyers to wear the Muslim head scarf and "cover all except face and hands" when they appear in court (3). The Israeli military reports that there are now over 300,000 settlers in the West Bank (5). Israel prepares a ‘defense brief’ ahead of the expected publication by the UN of two critical reports on the Gaza war (7).Two U.S. Senators circulate a letter urging President Obama to press Arab nations to make peace overtures to Israel (13).

The New York Times looks at how Hamas is attempting to gain support through a new public relations push (1). The U.S. warns Israel against building in the controversial E-1 area of East Jerusalem (3). The President of the Union of Reform Judaism says that most U.S. Jews support President Obama’s demand for a full Israeli settlement freeze (4). A pair of articles assess difficulties faced by Arabs living in Israel (5) (10). Israeli Prime Minister Netanyahu says he is ready to resume peace talks with the Palestinians immediately (6). A recently released poll finds a majority of Israelis wary of Palestinian leadership, and of a U.S. backed peace process (9) (13).

The Christian Science Monitor profiles the Israeli city of Tel Aviv (1). President Obama seeks reciprocity from Arab nations as well as Israel in pursuit of Mideast peace (2), while Bahrain reacts to calls from its crown prince for a new approach to Arab relations with Israel (7). BBC News tells the story of a four year old girl paralyzed in the Gaza war (5). A report released yesterday shows that the Israeli government is substantially subsidizing Jewish settlements in the West Bank (8). UN Secretary General Ban Ki-Moon calls on Israel to halt settlement construction (14).

The US-Israel dispute continues over settlements (1, 2, 5, 8, 9, 10, 11), especially in Jerusalem, and the future of the separation barrier (7, 18). Speculation continues about the state of relations between the Obama administration and PM Netanyahu (6, 13, 15, 16). Netanyahu urges Jewish investment in the Palestinian economy (14). Hamas claims it will not block a PA-Israel agreement (4). The Israeli government decides to remove all references to the Palestinian Nakba from school textbooks (17).

The US-Israel dispute over settlements generally and construction in East Jerusalem in particular continues to develop (2, 3, 5, 7, 13, 16, 17). Several reports highlight divisions within Israel on the issue (1, 9), while Chief Sephardi Rabbi Shlomo Amar called on American Jews to insist that settlements were a religious requirement. Ha’aretz reports that Israel is considering dismantling more outposts (6) but also confiscating more Palestinian land (7), and confirms that in spite of claims by PM Netanyahu and other Israeli officials, very few Palestinians are eligible to buy property in West Jerusalem (8).