The outlines of a Palestinian state are emerging in the West Bank. The New York Times says direct talks are another serious chance for peace, and the LA Times says they are better than the alternative. Richard Cohen says both sides must make compromises. PM Fayyad apologizes for the disruption of anti-negotiation activities in the West Bank and says a self-sufficient economy is the next PA goal. Two thirds of Palestinians back negotiations with Israel. The PA issues a new document outlining the second year of state building. Israel is considering “goodwill” gestures to the Palestinians. Fayyad says PM Netanyahu must explain his understanding of a Palestinian “state” and that negotiations are at a make or break moment. The prominent rabbi who wished death on all Palestinians now says he understands the need for extending the settlement freeze. Israelis anticipate US military aid in the event of an agreement. Gershon Baskin looks at lessons from previous negotiations. The Forward looks at the new “Emergency Committee for Israel.” Ghassan Khatib warns that a pragmatic two state solution may become impossible. Yossi Alpher mocks the right wing Israeli version of a “one-state solution."

The settlement issue looms as an early obstacle in direct talks. Tensions are running high as negotiations approach. Gadi Taub says settlements threaten the Zionist project. Several commentaries note Pres. Obama is taking a significant risk for peace. The Detroit Free Press says Obama can earn his Nobel Peace Prize by securing an end to the conflict. Pres. Abbas says talks must be serious, cannot proceed alongside settlement activity, and Israel will be to blame if they fail. Palestinian merchants clear shelves of settlement products. PM Netanyahu says he never agreed to limit settlement activity after Sept. 26. The US condemns, and Netanyahu distances himself from, statements by a leading Israeli rabbi calling for death to Abbas and all the Palestinians. Tony Karon speculates that the US may be positioning to impose its own formula after talks fail. Relations between Hamas and Islamic Jihad in Gaza are deteriorating, and Abdullah Iskandar says Hamas has shown it will brook no opposition.

The settlement issue looms as an early obstacle in direct talks. Tensions are running high as negotiations approach. Gadi Taub says settlements threaten the Zionist project. Several commentaries note Pres. Obama is taking a significant risk for peace. The Detroit Free Press says Obama can earn his Nobel Peace Prize by securing an end to the conflict. Pres. Abbas says talks must be serious, cannot proceed alongside settlement activity, and Israel will be to blame if they fail. Palestinian merchants clear shelves of settlement products. PM Netanyahu says he never agreed to limit settlement activity after Sept. 26. The US condemns, and Netanyahu distances himself from, statements by a leading Israeli rabbi calling for death to Abbas and all the Palestinians. Tony Karon speculates that the US may be positioning to impose its own formula after talks fail. Relations between Hamas and Islamic Jihad in Gaza are deteriorating, and Abdullah Iskandar says Hamas has shown it will brook no opposition.

Martin Indyk says there are four reasons for optimism on negotiations. Ben Smith decodes peace process rhetoric. Palestinians say settlers assault a nine-year-old child. Pres. Abbas says the PLO will negotiate in spite of Palestinian opposition. The Israeli military continues a crackdown on soldiers posing with Palestinian prisoners. A Palestinian human rights group says Hamas is preparing to close its operations in Gaza. PM Netanyahu proposes biweekly meetings with Abbas during negotiations, and is maintaining a careful ambiguity on settlements. Israel's negotiating team will be led by Yitzak Molcho and include only four people. Aluf Benn says Netanyahu may prove to be Israel's Gorbachev. The US is reportedly proposing signing an agreement within one year to be implemented over 10. An Israeli Cabinet minister says any settlement freeze should also apply to Palestinian construction. Ahmed Moor says Lebanon's new rules for Palestinian refugees don't go far enough. A book advocating the killing of non-Jews test the limits of free speech in Israel. Palestinian artists and advertisers use the separation barrier as a blank canvas. Ahmad Majdoubeh says Abbas needs more Arab backing.

Bedouins and Israel struggle over a patch of land in the Negev desert. George Will yet again denounces the concept of peace. An anti-negotiation protest in Ramallah is broken up. Palestinians warn negotiations could be quickly derailed. Settlers clash with Palestinian residents in Silwan. Palestinians say a freeze on Israeli settlements must include Jerusalem. The Israeli cabinet is hotly debating the issue. Ha'aretz says the PLO is again climbing out on a long limb. Pres. Abbas calls the negotiations “a historic opportunity.” D. Bloomfield says neither Abbas nor PM Netanyahu seem to want the talks. Israel refuses a request by Tony Blair to increase electricity to Gaza. The Independent profiles a Palestinian nonviolent protest leader convicted of “incitement.” A lawsuit accuses the IRS of hindering right wing pro-Israel organizations. Netanyahu's former Chief of Staff is a leader in the fight to expand settlements. Abdel Monem Said asks whether Arabs want the talks to succeed. Daoud Kuttab says the international community must help the parties. George Hishmeh says the Palestinian position isn't as weak as it appears. Hussein Ibish says extremists on both sides are trying to sabotage the negotiations before they begin.

Rabbi Kenneth Chasen says a Palestinian state is emerging in the West Bank. FM Lieberman says the settlement freeze should not be extended and a peace agreement is unlikely. Hamas leaders call negotiations “illegal” and say they will “eliminate” the Palestinian cause. An Israeli court convicts a leader of Palestinian nonviolent protests of “incitement.” Reuters says the question of Gaza will be missing during the talks. Protesters challenge a no-go area in Gaza. US negotiators visit the region and say they expect an agreement within a year. Aluf Benn says this is possible. Akiva Eldar says US pullout from Iraq increases its interests in an agreement. Right-wingers in Likud meet to promote settlement expansion. Bassem Eid accuses the PA of practicing discrimination. Israeli courts allow Palestinians married to Israeli citizens to stay in the country. The younger generation of Palestinian refugees is less interested in return. Carlo Strenger says if talks fail, Palestinians should unilaterally declare independence. The JTA looks at Jewish American responses to the negotiations, including the joint ATFP-JCPA statement. Mamoun Fandy says the US wouldn't be convening the talks if it wasn't 70% sure of success.

PLO officials say negotiations will be difficult but an agreement is possible. The settlement freeze issue is unresolved, being debated within the Israeli cabinet, and the US says will be discussed in negotiations. David Makovsky says there is reason for optimism. The CSM says international support is critical. Pres. Abbas appoints a new Chief of Staff. Palestinian students in occupied East Jerusalem face a critical shortage of classrooms. Facing a budget crunch, the PA cuts spending on vehicles. A strike by Israeli diplomats threatens PM Netanyahu's trip to Washington. Aziz Abu Sarah sees hope for the future. The UN says Israel is not cooperating with its investigation into the flotilla attack. Bilal Hassen says the US is not supporting its Palestinian allies. Ghassan Khatib says negotiations still lack clear terms of reference. Yossi Alpher says the negotiations will be useful, but probably not on final status issues. Hussein Ibish welcomes negotiations but says Palestinian state building remains essential.

ATFP Advocacy Director Ghaith Al-Omari discusses direct negotiations on the PBS Newshour. A new mall opens in Gaza. Charles Glass says the Israeli-Palestinian conflict is about politics, not religion. Palestinians express concern about negotiations, but PM Netanyahu expresses optimism. Activists say support is growing for boycotts against Israel. PLO officials say renewed settlement activity could threaten negotiations. Amira Hass looks at the politics of road paving in the occupied territories. Ha'aretz interviews a leading settler rabbi who wants all non-Jews in Israel and the occupied territories expelled to Saudi Arabia. The Jerusalem Post finds some reason for optimism about the negotiations. A group of women Israeli soldiers denounce the treatment of Palestinians. Lara Friedman says two states are the only solution. Israeli authorities question the authenticity of Muslim gravestones in a cemetery at the heart of a major controversy in occupied East Jerusalem. The Gulf News says the deck is stacked against Palestinians in the negotiations, and the Arab News says the one-year time frame is too ambitious. Hussein Ibish looks at the new PA education initiative.

Sec. Clinton is expected today to announce direct negotiations to begin in Washington on Sept. 2, and the Quartet to issue a statement saying they can be completed within one year. The UN criticizes Israeli restrictions on Gaza. Israel restricts Palestinian access to Jerusalem during Ramadan. The PLO defends Pres. Abbas' statements recognizing Jewish rights in Israel. The ex-Israeli soldier who posed with Palestinian prisoners says she would gladly kill and slaughter Arabs. Homeless Gazans seize a Hamas building. Anshel Pfeffer says a whole generation of Israelis have grown up seeing the Palestinians as nonhuman. Arab states are not to meeting their pledges to the PA. Mohamad Alasmar says "price tag" settler violence is tolerated by the Israeli authorities. A survey suggests 56% of Jewish Israelis believe "the world is against us." Ron Prosser says Israel will deal with Hamas only when it is not violent. Jesse Rosenfeld says different groups of Palestinians should show more solidarity with each other. Ben White looks at Israel's demand Palestinians recognize it as a "Jewish state." Time looks at the easing of restrictions on Palestinian refugees in Lebanon.

A former Palestinian intelligence chief passes away. George Will calls the search for peace “obscene.” Palestinian students learn about the Holocaust. The UN welcomes Lebanon's easing of restrictions on Palestinian refugees, but the Arab News says it's not enough. The UN publishes Israeli and PA responses to the Goldstone report. Another settler rabbi is arrested suspicion of incitement and a rally is held in support of rabbis authorizing the killing of non-Jews. Israeli soldiers are accused of looting from the Gaza flotilla. A senior UN official calls on Israel to extend the settlement moratorium. Settlers and Palestinians recall the 2005 Gaza redeployment. Israeli groups launch Wikipedia editing seminars. After criticism from the right, the New Israel Fund considers guidelines for grantees. The Forward profiles Israeli Amb. Michael Oren. JJ Goldberg looks at the legality of the flotilla raid. Rami Khouri says Israeli leaders promote a culture of victimhood. Neil Berry profiles Palestinian writer Raja Shehadeh. Hussein Ibish looks at the new PA initiative on education.