Israel launches a major civil defense exercise. The LA Times interviews Palestinian MK Tibi. The Wall Street Journal interviews Israeli Pres. Peres. Hamas' financial crisis worsens. Edward Djerejian says borders are the key to peace. Israel says it will ease West Bank checkpoints. Australia expels an Israeli diplomat over the Dubai assassination. Italian grocery chains ban settlement goods. Gaza extremists torch a UN children's camp. Israeli and Palestinian negotiators agree to the principle, but not the scope, of a land swap. Palestinian nonviolent protesters are injured by the Israeli military. Ha'aretz highlights Palestinian villagers trapped by Israeli restrictions. Israel denies offering nuclear weapons to apartheid-era South Africa. Israel is retroactively "authorizing" both Palestinian and settler buildings. Hamas claims to have captured an Egyptian "spy." The PA promises to find alternative employment for Palestinian settlement workers. Hussein Shobokshi accuses Israel of preparing a mass expulsion of Palestinians in a coming conflict. ATFP presents a set of resources illustrating US support for a two state solution and its centrality to the American national interest.

Palestinians have reportedly opened proximity talks with a surprisingly generous offer on borders. Israel is blocking official mail between the West Bank and Gaza. PA boycott volunteers say the Israeli army is searching for them. Israel says it is determined to break the boycott. Settlers in occupied East Jerusalem denounce negotiations. Experts say water may not prove a difficult issue. Palestinians accuse Israel of going ahead with planned home demolitions. Palestinian officials deny they are secretly negotiating with NATO. Shaul Mishal and Doron Mazza say Israel should propose a Palestinian state with provisional borders. Israel bombs three Gaza tunnels. The Economist profiles Palestinian state building efforts and Israeli extremists protest against the project. The Jerusalem Post says negotiations are off to a rocky start. Jonathan Power says Israel's policies are self-defeating.

Lanny Davis says peace should be based on Israelis and Palestinians coming together. Pres. Obama tells Jewish members of Congress he will not seek to impose a US plan.A new website explores obstacles to peace. Sasha Polakow-Suransky looks at "alternatives" to a two state agreement. Ma'an interviews a Salafist-Jihadist militant from Gaza. The US donates $1.4 million to UNRWA. Palestinians register formal complaints with the US about Israeli actions. Hamas arrests a senior Fatah leader in Gaza. Palestinians say settler efforts to break their boycott will fail. Reports are growing of family sexual abuse in Gaza. Israel expects the Palestinians to increase diplomatic pressure on settlements in spite of negotiations. Gideon Levy says Israel is starting to resemble North Korea. Israeli extremists rally in support of insubordinate troops. George Hishmeh says Arab funding is needed to counter Israeli propaganda. Daoud Kuttab explains the difficulties for Palestinians to keep their Jerusalem residency. Hussein Ibish says the US may not have a plan B for peace, but the Palestinians do. This Week in Palestine profiles organic farmers.

More details emerge about Hamas' destruction of Palestinian homes in Gaza. Palestinian students support the PA settlement goods ban. Health and economy indicators are down in Gaza but slightly up in the West Bank. Hamas dismisses the idea that Israel would reoccupy Gaza. The PA, human rights groups condemn Hamas executions. Ha'aretz says Israel should apologize for banning Noam Chomsky, and Carlo Strenger says is encourages an academic boycott and flirts with totalitarianism. Yoel Marcus says if Israel does not act, the world will force it to. Pres. Abbas reportedly says Palestine would accept NATO forces on its borders. Settlers say the PA boycott will backfire. Special Envoy Mitchell will formally launch proximity talks next week. Palestinians commemorate the Nakba. Elvis Costello cancels a concert in Israel in protest at the treatment of Palestinians. Hussain Abdul Hussain says Palestinian nonviolence may be the path to statehood. Sami Moubayed says PM Fayyad is following in a tradition of populist Arab politicians. A.B. Yehoshua says Israeli-Palestinian cooperation on peace is the best answer to Iranian meddling.

Israelis debate, PM Fayyad condemns, Israel's barring of Noam Chomsky and other Jewish critics from the occupied territories. Roger Cohen says the rising fortunes of a West Bank brewery are a barometer of the success of the PA's policies. The PA launches a door-to-door settlement goods boycott effort, introduces penalties for merchants. Settlers call the policy "economic terror." Palestinian girls win an award at the Intel Fair. Hamas executes three men. Xinhua asks how to tell if there is progress in talks. Israel rejects Qatari diplomatic offers. The Israeli military is concerned settler violence could spark another Palestinian uprising. Haaretz begins a series on the controversial new "Museum of Tolerance" in Jerusalem. Israel agrees to a French request to allow building materials into Gaza to rebuild a hospital. The JTA asks if PM Netanyahu's policies are alienating Israel's European allies, and interviews Aaron David Miller. Ali Sawafta and Tom Perry analyze PM Fayyad's popularity.

Israel prevents Noam Chomsky from entering the West Bank. The Washington Post looks at the PA settlement boycott. The Christian Science Monitor profiles the first planned Palestinian city. Some Israelis say the Gaza blockade has failed. Palestinian officials say negotiations are unlikely to succeed. The PA dissolves the ministries of sport and information. Israel shuts down the PA municipal office in Hebron. Israeli leftists rally against the occupation. Palestinians mark the 62nd commemoration of the Nakba. Hamas destroys dozens of Palestinian homes in Gaza. US Jewish leaders echo a European call to end settlement activity. Israeli troops kill an elderly Palestinian man in Gaza. Egypt reportedly ends all contact with Hamas. Extremist settlers blame the Israeli military for their own violence. West Bank highway 443 remains closed to Palestinians despite a court order. Adel Safty says archaic Israeli beliefs are threatening peace. Peter Beinart looks at changing Jewish American attitudes towards Israel.

Newsweek analyzes Israel's reaction to the PA settlement boycott. Israeli settlers kill a stone-throwing Palestinian child, and break a woman's nose in separate incidents. A senior PLO official says progress in talks is unlikely. Israeli ministers squabble over Jerusalem settlements, leaving analysts befuddled. Yoel Marcus says more American pressure on Israel is coming. Hagai El-Ad and Larry Derfner denounce the campaign against Judge Goldstone, as an effort is launched to bar him from the US. Following US pressure, Israel puts Palestinian home demolitions on hold. Human Rights Watch calls the destruction of Palestinian property in the Gaza war unlawful. The US will provide $200 million for an Israeli missile defense system. Omar Rahman says an imposed solution is required. Palestinian citizens of Israel say they're being targeted by the authorities. Hassan Haidar says Gazans should not pay the price for Hamas intransigence. Hussein Ibish looks at new Palestinian strategies for independence.

Limited construction materials enter Gaza. A Gaza man says Hamas tortured him for allegedly having affairs. Palestinian officials say Gaza's banking system is sound in spite of the closure of the Arab Bank branches. Israeli officials vow to keep up settlement activity and demolish Palestinian homes in occupied East Jerusalem, but DM Barak warns against such "provocations" and Ha'aretz calls them "dangerous incitement." The PA accuses Israel of sabotaging peace talks. The US pledges $500 million in aid to the PA. US officials express concern about settler violence. Alan Dershowitz says Salam Fayyad is a real partner for peace. Jewish Jerusalem residents criticize Elie Wiesel's statement on the city. The GAO says Israeli restrictions, Palestinian limitations are hampering the development of new security forces. High school students object to an exam question identifying Edward Said as a Palestinian. The National highlights the difficulties of Palestinian life in Jerusalem. Elias Harfoush is not optimistic about new negotiations. George Hishmeh says Israel should be accountable to the US. Sasha Polakow-Suransky says Jewish critics of Judge Goldstone are ignoring the history of Israeli-South African relations.

The Jerusalem Old City Initiative releases new proposals, and former New York Mayor Ed Koch also has suggestions. Fatah accuses Israel of planning a large mall in occupied East Jerusalem. Israel is refusing to allow the relative of an assassinated Hamas operative to leave Gaza for urgent medical treatment. Pres. Obama and Pres. Abbas reportedly agree to begin talks with border and security issues. Former PM Olmert says Arab neighborhoods in Jerusalem must belong to the Palestinians. The Arab Bank shuts down all its operations in Gaza. Pres. Obama reiterates his commitment to a Palestinian state and holding both sides accountable. Palestinians say Israel is withholding Jerusalem access for students who refuse to become informants. Ben White says Israel is trying to stifle dissent. Palfest promotes Palestinian writers. JJ Goldberg examines incitement. Mkhaimar Abusada says a failure of talks will create a period of volatility in Palestinian politics. Gilead Sher says the US must remain hands-on. Michael Sfard says the settlement movement may benefit from the partial moratorium. Eyal Press asks what the Israelis really think of Obama. Gilbert Achcar looks at Arab and especially Palestinian attitudes towards the Holocaust.

Two Palestinian citizens of Israel are arrested on charges of spying for Hezbollah, hundreds protest. The UN development says there is a lack of human security in the occupied territories. A fire at an Israeli warehouse causes heavy losses to Gaza merchants. Israeli settlers increase attacks on Palestinian mosques. Bradley Burston suggests Israel is starting to resemble a police state. Israel says it will demolish 46 settler structures for violating the partial moratorium. Gideon Levy describes Israel's campaign against pro-Palestinian foreign visitors. An Israeli NGO seeks to keep a West Bank highway closed to Palestinians. DM Barak says the occupation is eroding Israel's global status. Gershon Baskin urges optimism on proximity talks. Daoud Kuttab says peace must be pursued by all means. Uri Avnery says John Mearsheimer is wrong to think peace is impossible. Ghassan Khatib says settlements remain the make or break issue. Yossi Alpher says PM Netanyahu wants direct negotiations. Mkhaimar Abusada says any failure will produce a period of volatility in Palestinian politics. Sasha Polakow-Suransky summarizes Israel's deep relationship with apartheid South Africa in light of accusations against Judge Goldstone.