NEWS: Palestinian financial woes increase, threatening the institution-building program. US-Palestinian relations have deteriorated significantly. Concern about a Palestinian UN initiative is growing, Hamas has no clear position on it, and the EU remains divided. European diplomats say Palestinians have told them that they do not plan to approach the Security Council for full UN membership. Egypt tightens security after attacks on the Israeli Embassy in Cairo. Israeli intelligence recommends an urgent return to peace talks with the Palestinians. COMMENTARY: The New York Times says the US and its allies must work quickly for a compromise at the UN and keep funding the PA. The Forward also says compromise is essential. Both Ha'aretz and the Jerusalem Post say Israel and Egypt must quickly repair their relationship. The National says attacks on the Israeli Embassy in Egypt show Israeli policies are stoking extremism. Joseph Dana thinks the Netanyahu government is about to collapse. Osama Al Sharif says Israel needs to adapt to new regional realities. Adel Safty thinks Palestinians are well positioned for success at the UN. The International Crisis Group issues a new report on Israel and Palestine. Prince Turki al-Faisal says US-Saudi relations would be badly damaged by US opposition to Palestinian statehood.