NEWS: PM Fayyad says the PA will cut spending and raise taxes to try to address a financial crisis. Israeli authorities charge 5 settlers in connection with an attack on a military base in the occupied territories. FM Lieberman repeats that he would like to remove some Arab villages from Israel in any peace deal. Jordan reportedly seizes the assets of Muhammad Dahlan and his brother. Palestinian reconciliation talks appear to be faltering as Fatah and Hamas exchange bitter accusations. The Palestinian version of "Sesame Street" loses funding for its next season due to a cut off in US aid. Israeli experts say they expect a large cyber attack sometime in the future. Palestinians are skeptical about prospects for renewed negotiations with Israel. Israel arrests four Palestinian men allegedly carrying weapons. COMMENTARY: Dennis Ross says the only way forward is for Israel to change realities on the ground to strengthen Palestinian leaders like Pres. Abbas and Fayyad who believe in peace and nonviolence. Phyllis Bennis says Pres. Obama's real problem with Israel is its policies towards the Palestinians. Carlo Strenger says secular Israelis and Palestinians should find enclaves from religious fanatics. Jeff Barak says Israel is probably headed for an early election. Susan Hattis Rolef looks at four possible scenarios between Israel and the Palestinians. Harriet Sherwood says splits in Hamas are becoming more obvious. Uri Avnery says Hamas' recent moves are making another war in Gaza less likely. Yossi Alpher says Israelis and Palestinians are too far apart for meaningful negotiations. Shaul Arieli says Israel desperately needs new leadership that believes in a two-state solution. The Chicago Tribune looks at the effects of the Arab uprisings on Hamas' policies and prospects.

NEWS: Israel and the United States will conduct a major joint missile defense exercise. A Saudi computer hacker is continuing a campaign against Israeli sites. Hamas leader Mishaal makes a surprise visit to Cairo. Israeli, Palestinian and American negotiators will meet again on Monday. Hamas leaders dismiss the negotiations. Analysts say by hosting the talks, Jordan is defending its strategic interests. US officials say Egyptian Muslim Brotherhood leaders have given them assurances on the peace treaty with Israel. Two Palestinian citizens of Israel are arrested on charges of working with Hamas. Palestinians say Israel is creating a politically-motivated series of parks in occupied East Jerusalem. The Forward profiles the far-right-wing Israeli politician Danny Danon. COMMENTARY: The Huffington Post interviews former Pres. Carter on brokering Egyptian-Israeli peace. Mahmoud Abu Rahma says some Palestinian “resistance groups” have caused serious problems for people living under their rule and neglected governance. Yoel Marcus says Israel is making a mistake if it thinks Pres. Obama is no longer effective. Kadima leader Livni says she misses former PM Sharon because he cared about Israel's long-term future. Hirsh Goodman says the Israeli government has been ineffective in fighting for Israel's legitimacy.Jane Eisner looks at the role of Fadwa Barghouti. Sarah Wildman says criticism of Israeli policies cannot be conflated with anti-Semitism. Rami Khouri says the parties are beginning 2012 with a return to failed models of diplomacy. A.B. Yehoshua says Israeli policies and Palestinian conduct are dragging both peoples towards an unworkable binational reality. Daniel Gordis says loving Israel means sometimes defending and sometimes criticizing it.

NEWS: Former PM Olmert is indicted on bribery charges. Israeli officials say they are rethinking their policy on prisoner swaps. The PA is transferring funds to Gaza to offset a financial crisis. Hamas leader Hanniyeh arrives in Tunis as his tour continues. Last year the PA prosecuted 517 merchants for violating the settlement goods ban. Israeli authorities say they are struggling to contain Jewish extremists in the occupied territories. The Israeli military rabbis distribute an image of Jerusalem with the Dome of the Rock erased. Hamas is adapting its positions, but not enough to join the peace process, experts say. Renewed negotiations with Israel may strengthen the hand of Pres. Abbas. COMMENTARY: Gideon Levy says Israel must salvage its relations with Turkey. Nahum Barnea says it's ridiculous to describe Jewish Americans critical of Israeli policy as “anti-Semites.” The Economist says the PLO has little choice but to seek a rapprochement with Hamas. Glenn Kessler says Rick Santorum is profoundly mistaken to claim that “no Palestinians live in the West Bank.” Aaron David Miller says admitting Palestine as a full member of the UN under current circumstances is a terrible idea, but Mustafa Barghouthi says it is essential. Hillel Neuer claims that Gaza is no longer under Israeli occupation. Michael Luongo looks at accusations of “pinkwashing" by Israel. Ronald Lauder says Israel should concentrate on upgrading its submarine forces to create more deterrence. Barak Ravid describes the background of the Jordanian-brokered Israeli-Palestinian talks.

NEWS: Palestinian and Israeli negotiators are meeting this week to try to revive peace talks, but this time the US is not playing a central role. Palestinian leaders say their policies will depend on the outcome of the talks with Israel. Hamas leader Haniyyeh is visiting Turkey on the first leg of a wider regional tour. The Israeli government is preparing to deal with court orders to dismantle “unauthorized” settlement outposts. Hamas leaders in Gaza say nonviolent resistance does not apply there. Palestinian anti-corruption officials are reportedly looking into foreign bank accounts. Pres. Assad may meet with Hamas leaders in Damascus. Israel revokes the amnesty granted to the co-founder of a theater in Jenin. Israel announces 230 additional settlement housing units in occupied East Jerusalem. COMMENTARY: In an interview with Yedioth Ahronoth, PM Fayyad says Palestinians have proven they are ready for independence. Arron David Miller says PM Netanyahu and Pres. Obama do not like or trust each other. Ron Gilran says Israel may be closer to another large-scale military operation in Gaza. Shimon Shiffer says Israel has a peace partner even if national narratives are not compatible. H.D.S. Greenway says the occupation is Israel's tragedy. Barak Ravid says the Israeli right wing is deliberately suppressing the truth about Palestinian-Israeli demographics. Musa Keilani welcomes European pressure on Israel. Rami Khouri says Palestinian national unity is essential in 2012. Nida' Tuma says Palestinian women are increasingly demanding equal rights in their society.