Fatah and Hamas announced the outlines of a possible national reconciliation agreement. The US may be reconsidering aid to Palestinians as a consequence, key members of Congress warn. The White House says any new Palestinian government must renounce terrorism and recognize Israel. Jackson Diehl says if the agreement is implemented it will mean the Palestinians are walking away from the peace process. Pres. Abbas' office dismisses criticism from PM Netanyahu. FM Lieberman says Israel will not negotiate with a unity government, and a Hamas leader says negotiations will not be conducted by a new government. Israel launches a nationwide war drill. Israel worries about the future of security cooperation with the PA. Ha'aretz says the agreement may work to PM Netanyahu's advantage. Aluf Benn concludes Hamas has taken over the Palestinian movement. Israel prepares to block the next Gaza flotilla. Israel anticipates and plans for political changes in Syria. Hamas disperses a pro-unity rally in Gaza. Abbas reiterates conditions for resuming negotiations with Israel. Israeli forces arrest settlers trying to enter a holy site in the occupied territories which was the scene of a recent shooting. Larry Derfner criticizes Israel's treatment of Arab air travelers. Daoud Kuttab says chances for the birth of a Palestinian state this fall are about 50-50.

Fatah and Hamas announced the outlines of a possible national reconciliation agreement. The US may be reconsidering aid to Palestinians as a consequence, key members of Congress warn. The White House says any new Palestinian government must renounce terrorism and recognize Israel. Jackson Diehl says if the agreement is implemented it will mean the Palestinians are walking away from the peace process. Pres. Abbas' office dismisses criticism from PM Netanyahu. FM Lieberman says Israel will not negotiate with a unity government, and a Hamas leader says negotiations will not be conducted by a new government. Israel launches a nationwide war drill. Israel worries about the future of security cooperation with the PA. Ha'aretz says the agreement may work to PM Netanyahu's advantage. Aluf Benn concludes Hamas has taken over the Palestinian movement. Israel prepares to block the next Gaza flotilla. Israel anticipates and plans for political changes in Syria. Hamas disperses a pro-unity rally in Gaza. Abbas reiterates conditions for resuming negotiations with Israel. Israeli forces arrest settlers trying to enter a holy site in the occupied territories which was the scene of a recent shooting. Larry Derfner criticizes Israel's treatment of Arab air travelers. Daoud Kuttab says chances for the birth of a Palestinian state this fall are about 50-50.