NEWS: An aide to Pres. Abbas says Palestinians still prefer negotiations over UN initiatives. Hamas leaders say unity talks are making progress. Gaza’s economy remains desperate. Israeli security figures differ on the "dangers" of the flotilla. Some Palestinians say they need stability more than a UN resolution. Public outrage over a so-called “honor killing” in the West Bank prompts harsher sentences. Israeli Amb. Oren describes Israel’s ideas for negotiating terms of reference. Jordan’s FM says his country supports Palestinian UN initiatives. ATFP and APN announce another joint summer internship program. COMMENTARY: Ha’aretz says PM Netanyahu should take Ronald Lauder’s warnings seriously. Doron Rosenblum says Israel is in danger of becoming a theocracy. The Jordan Times says Palestinians need to unify before going to the UN. Samah Sabawi says Palestinians have both a right to return and to remain. Stuart Littlewood says Israel’s approach to the flotillas violates the law of the sea. Amos Guiora says Israel’s blockade of Gaza is self-defense. Neil Steinberg says Israelis and Palestinians both need a two-state solution. Daniel Levy looks of the role of borders in negotiations.