NEWS: The US says it's “disappointed” by new Israeli settlement plans. Another Palestinian militant is killed in an Israeli airstrike on Gaza. Rockets are fired into southern Israel. Israel closes a ramp leading to holy sites in occupied East Jerusalem. Deputy FM Ayalon calls UNRWA "morally and politically unacceptable." Many Israelis are deeply embarrassed by FM Lieberman's latest controversial statements. The Palestinian flag is raised at UNESCO's Paris headquarters. A Palestinian man is badly wounded by occupation forces during a West Bank protest. Reports continue to suggest Hamas is trying to relocate its headquarters from Damascus. An appellate court has upheld the convictions in the “Holy Land Foundation” case. Gaza continues to face serious shortages of water. COMMENTARY: Yoel Marcus says PM Netanyahu is setting himself up as the only possible leader of Israel. Ha'aretz says hard-line nationalism is isolating Israel. Stuart Weiss says religious extremism is harming Israel and the Jewish people. JJ Goldberg says Amb. Gutman was only telling the truth. Saleh Abdel Jawad says Israel doesn't want to undermine the Jordanian regime. Carlo Strenger says Israel has apparently decided to no longer be a Western state. Muath Al Wari says Palestine remains a central issue for most Arabs. Jeffrey Goldberg says a one-state arrangement will only lead to more conflict and two states are the only real solution. Scott Clement thinks Israel will not be a big factor in the 2012 election.

News: Reports continue to suggest Hamas is trying to relocate from Damascus. Palestinians promote statehood in Christmas celebrations.Two are killed in an Israeli airstrike on Gaza. Occupation forces announce more demolitions and land seizures in Hebron. Israel approves yet more settlement housing units in occupied East Jerusalem. Palestinians ask the UN to intervene to stop settlement construction.Senior PLO officials say that by demanding elections in occupied East Jerusalem, Hamas is trying to torpedo them everywhere. Amb. Shapiro says the US expects direct Israeli-Palestinian negotiations. Israel may send a small robot to the moon. Republican presidential hopeful Newt Gingrich forms an alliance with PM Netanyahu's stalwart Sheldon Adelson. In a rare ruling, an Israeli court acquits a Palestinian man on the grounds he was tortured. Commentary: Gideon Levy says the notion of peace has vanished from Israeli discourse. Ari Shavit says Israel is losing its base in the democratic West. Barak Ravid says Israel is hibernating through the “Arab Spring.” Ilan Manor says Netanyahu is in love with the US Republican Party. Irwin Cotler says Jewish refugees from Arab states need to be acknowledged and compensated. Nathan Guttman says frank talk about Israel from administration officials is not seen by many as a deliberate affront. Michael Jansen says most Israelis aren't going to listen to US criticism. Gershon Baskin says Israel needs a "historic leader." Labib Kamhawi says Israel's leadership is reckless. Hassan Barari says Jordan has much to fear from the impasse in the peace process. Akiva Eldar says Israel is probably going to release a large group of petty criminals in the second phase of the prisoner swap.

NEWS: Israel expels a Hamas leader from occupied East Jerusalem. Settlers are accused of torching another West Bank mosque. Fatah officials say no elections can be held before a national unity government is formed. An Israeli NGO says it's almost impossible for Palestinians to successfully pursue claims against occupation forces. Israeli troops kill a Palestinian militant in Gaza, and arrest 21 Palestinians in the West Bank. Quartet representatives will meet in Jerusalem next week.Though he has strongly denied it, some reports suggest PM Fayyad may be mulling a run for president. The British advertising oversight board has censured the PLO mission over maps not including Israel. Tensions are running high at a Palestinian refugee camp in Lebanon after a violent incident.Politico looks at increasing criticism of Israel's policies among some Washington liberal groups. COMMENTARY: Ha'aretz says Israel must stop changing the landscape of occupied East Jerusalem. Bradley Burston says a recent vote in Berkeley shows Jewish Americans are increasingly intolerant of diverse views on Israel. Chemi Shalev says by today's standards, the late Prime Minister Rabin would've been considered a dangerous heretic. The Jerusalem Post denounces recent comments by American officials about Israel, but Michael Berenbaum says criticism of Amb. Gutman and Sec. Panetta is unfair. Jonathan Guyer says a deep chill is setting into US-Israeli relations. Hugh Naylor agrees Israel is becoming dangerously isolated. Tony Karon says Israel's bellicose rhetoric towards Iran makes no sense. Mohammed Najib says Israel's control of 80% of Palestinian income in terms of tax revenues makes life impossible for the PA. Newt Gingrich says the Obama administration is “devoted to criticizing Israel.”

NEWS: Palestinian officials say they won't yield to Israeli “extortion” regarding Palestinian tax revenues. Four men accused of a sensational “honor killing” that has scandalized the West Bank deny the charges. Palestinians accuse Israeli settlers of abducting a shepherd. Palestinian officials say Israel must abide by its commitments to a settlement freeze before talks can resume. Israeli artists say it's ridiculous for the government to offer a prize for “Zionism” in the arts. In the next phase of the prisoner swap, Israel may seek to boost Fatah instead of Hamas. The International Organization of Parliaments says the PA is a welcome member, but Hamas cannot join. Israel is planning to forcibly evict thousands of Bedouins from their homes to near a rubbish dump to make way for settlers. A hard-line Israeli MK heaps praise on the late Sen. Joseph McCarthy. Israeli occupation forces demolish two Palestinian homes in occupied East Jerusalem. COMMENTARY: Roger Cohen says there's a lot more for Jewish Americans to be outraged at in Israeli policy than ads warning against life in the United States. Ha'aretz says human rights are in danger in Israel. Khaled Diab says PM Netanyahu and Pres. Ahmadinejad are "gifts to each other but curses on their nations.” Caroline Glick says "under Obama, the US is no longer Israel’s ally." Elliot Jager reviews a new book about the “Stern Gang” Jewish terrorist organization during the British mandate. Gal Beckerman looks at a new book by Pres. Peres about David Ben-Gurion. Linda Heard says US criticism is good for Israel. Yossi Alpher says Palestinian financial vulnerability does not compromise their claims for independence. Ghassan Khatib says Palestinians have faced worse financial crises in the past, but the political impasse and stagnation is crippling. David Brodet says the recent financial crisis has shown how vulnerable the PA is economically to Israel and donor nations.

NEWS: Sec. Panetta says Israel must “get to the damn table” and negotiate with the Palestinians. Israeli officials condemn statements attributed to Sec. Clinton critical of recent antidemocratic Israeli legislation. An Israeli entrepreneur opens an online university in the occupied West Bank. After an outcry from Jewish Americans, the Israeli government cancels advertisements warning against life in the United States. Officials from Hamas and Fatah meet to discuss reconciliation. Diplomats say Hamas is quietly scaling back its presence in Syria and Iran is threatening to cut off its funding and weapons. PM Netanyahu calls for a Likud party vote, which could lead to early national elections. Israeli rights groups again say the government is curbing free speech. The US has reportedly asked Palestinians to stop leaking contents of Quartet proposals. PM Fayyad offers a frank analysis of the present situation facing the PA. COMMENTARY: David Ignatius says Panetta was merely saying what most US officials think but rarely say in public, and the Gulf News says he was right. Akiva Eldar says Jewish Americans should use their influence to stop “Israeli incitement.” Ha'aretz interviews historian Rashid Khalidi. Musa Keilani says Israel's diplomatic woes are of its own making. In an interview with an Israeli newspaper, Senior Egyptian journalist Mounir Mahmoud says there is no danger of a cancellation of the peace treaty. Amira Hass says if a New York Times reporter had not been abused by occupation forces, a Palestinian woman's story would never be known.

NEWS: PM Fayyad says he will not lead a national unity government. Concern is growing in Israel over what could happen if it continues to refuse to submit a peace proposal to the Quartet. Israel is completing its barrier along the border with Egypt. The PA says it will now be able to meet payroll since Israel has released tax funds. Hamas fires 120 employees. Israel is constructing news roads between West Bank settlements and occupied East Jerusalem. PLO officials say they are going to push forward with efforts to gain UN membership.Hamas leaders affirm that Jordan is not Palestine. Israel's practice of not allowing Palestinians to travel out of Gaza to pursue claims against occupation forces is being challenged in court. Israel may lose $250 million in US aid due to American budget constraints.

COMMENTARY: Rep. Steve Chabot says the US gave clear warnings in advance it would defund UNESCO over Palestine's membership. Yoel Marcus says renewing peace talks with the Palestinians is the key to repairing Israel's relationship with Egypt. Ha'aretz says PM Netanyahu should stop undermining Israeli democracy. Uri Savir says 64 years after the UN partition resolution, the conflict is more or less back to where it was then. Ghassan Rubeiz says it's going to be difficult for Palestinian leaders to reconcile. Nader Mousavizadeh says the Arab uprisings have strengthened the hand of the Israeli right. Andrew Sullivan challenges allegations of Israeli “pinkwashing.” Jeffrey Goldberg complains that the Israeli government has created ads suggesting it is impossible to remain Jewish in the United States. Ephraim Sneh says Israel cannot allow its relations with Jordan to deteriorate.

NEWS: PM Fayyad says he is working to reduce the Palestinian dependence on foreign aid. Palestinians submit a detailed peace proposal to the Quartet, according to their deadlines, including a significant land swap, but PM Netanyahu refuses to make a counteroffer. The resumption of Israeli transfers of Palestinian tax revenues helps avert a financial crisis for the PA, but FM Lieberman denounces the move. Palestinian prisoners released by Israel get on with the business of daily life. Israel arrests 22 Palestinians in the West Bank. Pres. Obama tells Jewish Americans “no ally is more important than Israel.” Netanyahu complains about a recent meeting between Pres. Abbas and Kadima leader Livni. Hamas complains the PA continues to arrest its supporters in the West Bank. Germany confirms the sale of a sixth Dolphin submarine to Israel, and will pay for one third of it. COMMENTARY: ADL National Director Abe Foxman decries new Israeli laws that "violate democratic principles." Carlo Strenger says Israel's liberals face a wave of anti-Semitism. Douglas Bloomfield says weakening Abbas only strengthens Hamas. Asharq Al-Awsat interviews Mahmoud al-Zahar. Mohammed Azhar Ali Khan says Canada is on the wrong side of history in opposing Palestinian statehood. Nadim Rouhana says antidemocratic legislation in Israel threatens rights for the Jewish majority as well as the Arab minority. Howard Sumka says the struggle for peace must continue even if conditions are difficult. Uri Misgav says Israel was only hurting itself by withholding Palestinian tax revenues. Karl Vick says Gaza's economy continues to suffer as the peace process is it an impasse. Jonathan Rosen says dismantling outlying settlements has few disadvantages and would be a huge boost for Israel. Jesse Rosenfeld looks at a new book by Arthur Neslen on the diversity of Palestinian experiences.