NEWS: Israeli activists are hoping to revive their cost of living protests. Israel is bracing for a Palestinian UN initiative. The PLO says it will continue seeking diplomatic recognition even after September. Pres. Sarkozy is pushing for unified EU stance, but reports say it is badly split. Israel arrests a senior Hamas leader in the occupied West Bank. Pres. Abbas says the UN initiative is a result of Israeli refusal to comply with its international obligations. Israel threatens that any Palestinian UN initiative would put off further peace talks “for years.” COMMENTARY: Ma’an asks a number of experts whether a UN initiative would threaten refugee rights. Ha'aretz says Pres. Peres cannot save PM Netanyahu at the UN. Carlo Strenger says Israel could still deal with a Palestinian UN initiative. Douglas Bloomfield says Pres. Ahmadinejad's rhetoric makes him the best spokesman for the Israeli right. Ben White says all Palestinian leaders lack legitimacy. Leonard Fein profiles two Israelis with contrasting visions of the future. Bilal Hassen says the Israel-Egypt peace treaty has already been de facto revised. Karl Vick says Palestinians are torn between full UN membership and observer status. The Economist says the threat to cut off US funding to Palestinians is a mistake for everybody.