43 Palestinian officers are jailed, fined or demoted for abusing Hamas detainees, and PM Fayyad says past "excesses" will be halted. PM Netanyahu and other Israeli officials hint at potential for progress on negotiations, and reports suggest they oppose a "borders first" agenda. Israel approves four new settler buildings and the expansion of a Jewish religious school in occupied East Jerusalem. Israeli military officials cancel a trip to the UK for fears of arrest over human rights violations. A new "Israeli only" highway is planned in the occupied West Bank. A commentary in Ha'aretz says that a settlement freeze is in Israel's interest, and another argues for the release of jailed Fatah leader Marwan Barghouti independent of a prisoner swap with Hamas. A commentary in YNet argues in favor of boycotts and sanctions against Israel to promote peace. JTA looks at enforcement of the partial building moratorium. Jewish voices are among those protesting the siege of Gaza. Daoud Kuttab complains about the quality of Palestinian television programming for children, and says negotiations need to focus on the future of Jerusalem. Ghassan Khatib says that Israel's settlement construction and other measures over the past decade are "almost irreversible." Palestine forms a committee to seek membership in the WTO.

Rep. Mike Honda says two states are the only path to peace in the Middle East. Hamas prisoners report that abuses in Palestinian jails ceased in October. The LA Times profiles a major West Bank highway that has been closed to Palestinian traffic. Israeli opposition leader Tzipi Livni says peace is possible. Reports suggest that a new US plan envisages a Palestinian state within two years, but Israeli FM Lieberman calls this "unrealistic" and orders his diplomats not to "grovel." A Ha'aretz commentary asks settlers what kind of future they are building, and another argues there is very little difference between the occupation and apartheid. PM Fayyad looks forward to a Palestinian state free of fences and settlements, and Pres. Abbas reiterates that a settlement freeze is the precondition for renewed negotiations. A commentary in the Guardian says Israel is using water to harass Bedouins. The National says Israel is ready for another war in Gaza which is "ready to explode," and profiles bereaved physician Izzeldin Abuelaish. Hamas says it would join Hezbollah in any future conflict with Israel. Time Magazine reviews a year of Mideast missteps. Egyptian clerics quarrel over the legitimacy of Egypt's new barrier along the Gaza border.

Egypt allows 100 protesters into Gaza. 2009 saw a sharp drop in casualties in the occupied West Bank. Activists are helping civilians overcome the trauma of the Gaza war. Pres. Abbas says no effort will be spared to aid civilians in Gaza. A new report anticipates significant growth in the Palestinian economy. Ha'aretz reports that settlement construction is "booming" in the occupied West Bank, and runs a commentary saying Israel must tell settlers they can remain in a Palestinian state only as Palestinian citizens. PM Netanyahu proposes a peace summit. Authorities arrest, then release an Israeli settler in connection with last month's mosque arson. Palestinians say dramatic developments on peace are possible in the near future. The fate of jailed Fatah leader Marwan Barghouti may be key to an Israel-Hamas prisoner swap. The BBC says Gaza's economy has moved literally underground. American Jewish organizations back a former Somali official accused of human rights violations in an effort to protect Israel from lawsuits. Stalled peace talks have deepened the divide among Palestinians. The UAE manages to get humanitarian aid into Gaza. Backlash over the Gaza war has affected Israel's diplomacy. Ghassan Khatib says the two state solution is still alive, but being killed by Israeli settlement activity.