NEWS: An Israeli court rules that the state has no responsibility in the death of the American activist Rachel Corrie. Israeli schools are trying to address bigotry against Palestinians in the wake of the attempted lynching in Jerusalem. Israeli students in the extreme southern town of Sderot are now attending a rocket-proof school. Israel shells a Gaza compound after a rocket attack. Israelis are preparing gas masks and shelters in anticipation of a possible conflict with Iran. The UN suggests the Gaza Strip will become uninhabitable by 2020 if current trends continue. PM Netanyahu says the Etzion bloc of settlements south of Jerusalem are an integral part of Israel. Netanyahu suspends efforts to reorganize his personal investment portfolio. Human Rights Watch says the PA should investigate two incidents earlier this summer in which police beat protesters. Palestinian officials say Pres. Abbas will seek support for a renewed UN bid at the NAM conference. Israeli diplomats say FM Lieberman's attacks on Abbas are part of a campaign to discourage support for Palestinians at the UN. The PA says it is stopping recruitment and promotion due to its financial crisis. Increasing numbers of Palestinian students from occupied East Jerusalem are seeking degrees from Israeli universities. Pres. Morsy reassures Israel about his country's commitment to the peace treaty and security in Sinai, as Palestinian leaders reportedly express dissatisfaction with his government. Israeli officials are now claiming that the issue of Jewish refugees and migrants to Israel from Arab states is a “core issue” in negotiations with the Palestinians. COMMENTARY: Hussein Ibish argues Netanyahu and DM Barak have left themselves few good options in dealing with Iran's nuclear program. Amira Hass asks what can be learned from the Rachel Corrie case. Chris McGreal says the verdict reveals the Israeli "military mindset." Ha'aretz says Israeli settlement outposts are out of control. Gershon Baskin proposes a letter he thinks Abbas ought to send to the Israelis. Anat Hoffman says Israel must punish rabbis who preach hatred.