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.

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.