No compromise is reportedly reached on settlements. Israeli Amb. Michael Oren says Israelis want peace. The CSM looks at Israeli settlements and why Egypt seeks a major role in negotiations. P. Edward Haley offers four reasons not to be cynical. Sec. Clinton endorses Pres. Abbas, PM Netanyahu. Projectiles are launched against southern Israel from Gaza. Ha'aretz says the settlement freeze issue is a test for Netanyahu. Amira Hass says Palestinians have faced 40 years of building freeze. Some Palestinians say their leadership will have to continue with the talks no matter what happens with settlements. Israel is reportedly considering a prisoner release and expanded PA powers in the West Bank. Special Envoy Mitchell says the settlement freeze must be extended. Calev Ben-Dor says negotiations can be structured differently for better results. Gilead Sher says time is running out for a two state solution. The JTA says the Jewish American right is muted in the face of a potential extension of the freeze. Aaron David Miller says Netanyahu is the key to peace. Robert Danin provides an assessment of Palestinian state building efforts.

Sec. Clinton says a deal on settlements is possible and stresses the importance of negotiations. The Israeli government purchases the @israel twitter identity from a Spanish pornographer. Roger Cohen says most Israelis are uninterested in the peace talks. Residents of a West Bank settlement worry about their future. Israelis are not sure what to expect from their own leadership. The CSM says there is no Israeli consensus on settlements. Palestinians deny there is a crisis in the talks and say they will focus on land, borders and security. A new report says peace is the key to Palestinian economic revival. Israelis complain that a Palestinian “all or nothing” attitude is hampering talks. Israeli authorities in Jerusalem are considering more than 1,000 new settler housing units. A new report says settlers receive 22% more budgetary allocations than other Israelis. Another report says Israeli soldiers are rarely accountable for Palestinian civilian deaths. Nahum Barnea says PM Netanyahu has retreated to a zero-sum mentality. The Israeli military confirms that two Gazans killed in shelling on Sunday were “not terrorists.” Gershon Baskin says a creative deal on settlements is possible. Osama Al Sharif says there is grave danger for the region in not achieving a peace agreement.

PM Netanyahu signals flexibility on settlement building, and says Palestinians must recognize Israel as a “Jewish state.” Pres. Obama says negotiations may first focus on borders. Jackson Diehl asks which leader is bluffing. Ron Grossman urges giving peace a chance. Three Palestinians are killed by Israeli shelling in northern Gaza. Israel is allowing car parts into Gaza. Palestinian negotiators deny infighting. Peace Now says over 2,000 new settlement units will be built when the partial moratorium expires on Sept. 26. Ha'aretz looks at the plight of Palestinian residents of Jerusalem. Settlers vow to keep building no matter what and threaten to topple the Netanyahu government. A Bedouin village in southern Israel is raised for the fifth time in a few weeks. The end of Ramadan shows unmistakable signs of prosperity in the West Bank. The Palestinian labor group launches international campaign to boycott settlement products. The Arab News says Palestinians cannot continue negotiating with settlement construction ongoing.

Israeli settlers in Ariel are worried about the future. Fatah says settlements deepen the occupation. Five Palestinians are injured in Israeli air strikes on Gaza. A Palestinian citizen of Israel is shot dead near a West Bank settlement. Pres. Peres tells Pres. Abbas that PM Netanyahu is a partner in peace. Ha'aretz says Israel must emerge from the stigma of being an “occupation state.” Shulamit Aloni says a threat of real fascism is emerging in Israel. Hamas may introduce conscription in Gaza. Israeli settlers mobilize against the negotiations, and are certain they will fail.

The PLO says Israeli extremists and settlement construction should not be allowed to derail talks. The next round of negotiations will be split between Jerusalem and Egypt. Chief PLO negotiator Saeb Erekat denies apologizing to Israelis. Celebrating the new year, Israelis are pessimistic about peace. A new report says Palestinian security reform is threatened by the occupation and internal divisions. PLO officials say they won't recognize Israel as a “Jewish state.” Sec. Clinton says momentum is building in the Arab world in support of a two state agreement, and that there may never be another chance for peace. Ha'aretz interviews David Makovsky. Hamas accuses the PA of “protecting the enemy” and “treason” for arresting suspects in recent shooting attacks. The Jerusalem Post says PM Netanyahu is embracing new language to facilitate negotiations. The BBC looks at Hamas' presence in the West Bank. Sanctions against the UC Irvine MSU, for disrupting a talk by Israeli Amb. Michael Oren, are shortened. Randa Takieddine considers Europe's absence from the peace process. Social media are becoming a Middle East battlefield. The CSM reviews a new humor book about Middle East peace.

An American psychiatrist is helping children in Gaza cope with stress and trauma. Tom Friedman says it's time for Saudi Arabia to get involved in the peace process. The Arab press is skeptical about negotiations. The PA seeks to reduce public spending. Pres. Abbas says there can be no peace agreement that excludes Gaza. Israel considers impounding ships trying to break the blockade. A mortar launched from Gaza lands near Israeli schools, but causes no injuries. Hamas threatens the PA over arrests. Ha'aretz says the partial settlement moratorium will continue in practice. Aluf Benn says the most important thing Israel needs from negotiations is a border. The PA says it has arrested six people for last week's drive-by killing of Israeli settlers by Hamas. Pres. Obama and Sec. Clinton call on US Jews and Muslims to support peace. Palestinian politicians are outraged by a TV satire program. Ahmed Moor says Palestinian refugees in Lebanon should be disarmed and integrated. The JTA looks at settlements and other obstacles to peace, and interviews Israeli Amb. Michael Oren. Asharq Al-Awsat interviews Palestinian Spokesman Abu-Rudaynah. The Media Line looks at tensions between Palestinian and Iranian leaders.

Israeli and Palestinian leaders express optimism after the resumption of direct talks. Drive-by shooting attacks show Hamas is still able to operate in the West Bank. Daoud Kuttab says Palestinian independence is inevitable. Palestinian leaders angrily reject Iranian criticism of negotiations, and have asked the US to intervene on the settlement issue. Todd Gitlin and Liel Leibovitz say both sides must acknowledge each other's attachment to the land. The CSM says Palestinian and Israeli leaders must work together to block extremists. Palestinian officials say they are trying to reach a peace agreement and Israeli officials say one is possible within a year. FM Lieberman pushes for new settlement construction. Shaul Arieli says settlement construction hurts Israel. Egypt says $50 billion will be needed to pay for Middle East peace. Bradley Burston says religious extremists are enemies of humanity. The IMF says loosened Israeli restrictions have prompted Palestinian economic growth. Avi Shlaim says American intervention in negotiations is critical. The US temporarily restricts diplomats from traveling in the West Bank. Israeli authorities are accused of discriminating against Arabs in Jerusalem. Adel Al Toraifi says Palestinian state building is of paramount importance. Hussein Ibish looks at arguments for including Hamas in negotiations and its likely consequences.

Direct negotiations are haunted by the settlement issue and some experts worry they are too ambitious. Sec. Clinton urges Israelis and Palestinians to seek a future of peace. Ghaith Al-Omari, Gideon Grinstein and Aaron David Miller look back at previous negotiations. Hussein Ibish analyzes the settlement question. Ahmad Tibi says pressure on PM Netanyahu will be the key. Mohammed Dajani and Michael Zakim say there is hope for peace. The PA arrests two suspects in the killing of Israeli settlers near Hebron. Hamas and other militant groups in Gaza vow further attacks against Israelis. The US is pressuring Pres. Abbas to continue negotiations with or without a settlement freeze extension. The BBC looks at why Israeli-Palestinian peace is so crucial to American interests. Settlers voice opposition to negotiations. Daoud Kuttab looks at the Palestinian strategy for liberation. Shlomo Avineri says even cynics should entertain some hopes. The Arab News says the talks are off to a good start.

Direct talks are launched. PM Netanyahu is taking personal charge of Israel's strategy. The NYT asks a number of experts about settlements and settlers. Hussein Ibish and Michael Weiss look at Palestinian state building. Hussein Agha and Robert Malley say asymmetries in power complicate the negotiations. Pres. Abbas says now is the time for peace. The CSM says Jerusalem is the trickiest issue. Palestinians get unlikely support from some settlers. Settlers across the West Bank begin construction in defiance of government restrictions. Hamas claims responsibility for another West Bank shooting, and the PA vows to “hit them with an iron fist.” Avi Issacharoff says Abbas is a real partner in peace for Israel. Israeli officials in Jerusalem authorize headquarters for an Israeli volunteer rescue unit in a sensitive Palestinian neighborhood. 150 Israeli academics say they will boycott settlements. Abdul Rahman Al-Rashid wishes Abbas success. The National says extremists on both sides have nothing to offer.

The murder of four Israeli settlers on the eve of talks rattles leaders. Hamas claims responsibility and Ha'aretz says they have succeeded in embarrassing the PA. Israel seals off Hebron. The PA condemns the attack and arrests scores of Hamas militants. Nahum Barnea says it strengthens PM Netanyahu's hand in negotiations. Tom Friedman says Pres. Obama's efforts at stability in Iraq and Palestinian-Israeli peace are a uniquely ambitious combination and Bloomberg suggests these efforts may be aimed at countering Iran.. Pres. Mubarak says peace is possible. Pres. Abbas reiterates his commitment to peace. DM Barak suggests a compromise on Jerusalem including a "special regime" for tbe old city. US officials again say peace can be reached in a year. New statistics suggest reduced settlement activity in the first half of 2010. Ian Black says neither side seems ready to make serious concessions on peace. Rami Khouri says the US may be waiting until December to seriously pressure the parties. Hussein Ibish says a new book on "the Arab lobby" is comically wrong.