Israel begins to demolish the famous Shepherd Hotel in occupied East Jerusalem to make room for a new settlement. Sec. Clinton, the EU and other international leaders condemn the action, and the PA says it is destroying chances for peace. Palestinian-American business interests are trying to take over an Israeli real estate company. Israel bombs Gaza, with no injuries. Hamas urges militants in Gaza to stop attacking Israel. Israeli officials will travel to Washington for talks. Palestinians may ask for UN recognition. Israeli academics call for boycotting settlement universities. Hamas denies its leaders meet with Israeli officials. Akiva Eldar says PM Netanyahu's policies are creating a Palestinian state. The EU says East Jerusalem should be regarded as the Palestinian capital. A Knesset committee approves a draft bill to revoke citizenship from those accused of terror or espionage. Occupation forces kill a Palestinian man at a checkpoint. The BBC looks at the plight of Palestinian refugees in Lebanon. Tony Karon says the death of Palestinian protesters has reawakened the Israeli left. Ian Buruma says Israel is acquiring inappropriate friends on the European extreme right.