NEWS: PA Finance Minister Kassis tells a donor meeting that the Palestinian economic crisis is a threat to a two-state solution. The PA says it will sue the transport workers union if it goes on strike. Israel has reportedly taken urgent economic steps to ease the financial pressure on the PA, but Deputy FM Ayalon urges donor states to cut all funding to the PA. DM Barak says Israel should withdraw unilaterally from large parts of the occupied West Bank if peace talks with the Palestinians remain stalled. An obscure militia in the Sinai Peninsula claims a role in recent attacks. The violence in Sinai may force changes to the Israeli-Egyptian peace treaty. PM Netanyahu apologizes to UNSG Ban for leaking parts of a recent conversation. Israel says it has arrested an extortion ring linked to Hamas. PA security forces uncover a secret Hamas detention center in the West Bank. A Hamas official says Khaled Misha'al will step down as head of its Politburo. A press organization condemns the PA arrest of a journalist. A senior PA minister is reportedly being investigated for sexual harassment. COMMENTARY: David Ignatius interviews Pres. Ahmadinejad about Israeli threats and Iran's nuclear program. Ma'an interviews Vera Baboun, a leading candidate for mayor of Bethlehem. Chaim Levinson says the Israeli military is helping settlers develop armed militias. Ha'aretz says Israelis should listen carefully to what Pres. Morsy has to say about the Sinai Peninsula and the peace treaty. Asharq Al-Awsat interviews Hamas Deputy Leader Abu-Marzuq. Lena Odgaard says economic protests in the West Bank are also a political crisis for the Palestinians. The Times of Israel interviews Strategic Affairs Ministry head Kuperwasser. Amira Hass looks at the politics of water in the occupied West Bank.

NEWS: One year after failing to secure full UN membership, Palestinians are now considering seeking nonmember observer state status. PM Netanyahu's office claims this is a violation of the Oslo agreements. Egypt says it is working to promote Palestinian reconciliation. Experts are skeptical about Pres. Abbas' reported threat to resign. Palestinian security forces return three Israeli soldiers who strayed into Palestinian-controlled areas of the occupied West Bank. 30 international aid NGOs appeal to the Quartet to stop the ongoing demolition of Palestinian homes. Hamas says Egypt's disruption of tunnel trade is hurting the Gaza economy. Israeli forces kill three extremists in Sinai. Mitt Romney reportedly makes no mention of the peace process in a call with Jewish American leaders. The PLO says over 400 Palestinians have been killed in the conflict in Syria. A committee in the Irish parliament recommends a national ban on Israeli settlement products. COMMENTARY: Aaron David Miller asks how unsustainable the status quo between Israel and the Palestinians is. Yezid Sayigh says the Palestinians may renew their UN efforts this year, but show no signs of having better learned how to contain the fallout. David Rosenberg says, given the economic crisis, the PA can't even offer the Palestinians personal prosperity. Yossi Verter says if Netanyahu is reelected, his next term will probably be a repetition of his current term. Eva Illouz says Judith Butler is getting a taste of her own boycott politics. Danny Caravan says the reason Oslo failed is that the occupation persisted. Yoram Drori says because they have full citizenship and a homeland in the state of Israel, there are no Jewish refugees in the Middle East. Uri Savir says Bill Clinton should be the next Middle East envoy if Pres. Obama is reelected. Ben Capsit says Netanyahu had better begin preparing for the day after Obama is reelected. Ghada Karmi says Palestinians need a one-state solution. Zuheir Kseibati says Hamas might be gaining more from aligning with the Muslim Brotherhood than they did with Syria and Iran. Mohammad Salah says Egypt has got to get control over the Sinai Peninsula.

NEWS: Hamas accuses Israel of assassinating its officials in charge of tunnel smuggling. Egypt's new intelligence chief reportedly helped broker the release last year of an Israeli soldier held by Hamas.Catholic Church officials express concern about acts of vandalism against Christian sites in Israel and the occupied territories. Hamas is angered as the PA arrests its activists in the West Bank. Fatah officials deny reports Pres. Abbas is considering resigning. The IMF reiterates that the Palestinian economy is “facing serious risks.” A new poll shows most Israelis and Palestinians think any attack on Iran will result in a major war, and support a two-state solution. Israel's attorney general wants to prosecute “illegal” construction in the occupied West Bank. A Palestinian activist held by the PA has ended a hunger strike amid signs of his impending release. Palestinian officials say a UN General Assembly resolution would set the terms for a peace agreement, not contradict it. A new study shows Pres. Obama's middle name affects the way he is perceived by some Israelis.Palestinians are reportedly undecided regarding the timing of any renewed UN bid. COMMENTARY: Xinhua says Palestinian despair is pushing discussion of annulling the Oslo agreements. Ghassan Khatib says despite calm in the occupied West Bank, the PA is on the brink of collapse. Ari Shavit says PM Netanyahu is leading Israel's relations with the United States to the precipice.Ha'aretz says Israeli attitudes before 1993 that preferred the status quo to a peace agreement are returning. Douglas Bloomfield says it appears to be dawning on Netanyahu that Obama is likely to be reelected. Barbara Slavin says the new “fortress Israel” mentality leaves little room for diplomacy. Peter Beinart says the fact that the pro-Israel lobby isn't all powerful doesn't mean it doesn't exist. PLO chief of mission Areikat responds to recently publicized comments by Mitt Romney. Zvika Krieger says there are powerful answers to Romney's negativity about Israeli-Palestinian peace. Michael Desch says Netanyahu has gone too far in challenging the United States on Iran.

NEWS: The World Bank says the Palestinian fiscal crisis is intensifying. Various scenarios face Pres. Abbas in the context of the emerging crisis. The Israeli military holds its largest snap drill in many years. The PA criticizes Egypt for hosting a Hamas leader. Like Mitt Romney, many in the Middle East are losing confidence in the prospect of a two-state solution. Abbas says he will deliver a speech at the UN in September asking for nonmember observer state status for Palestine. A Palestinian militant-turned-theater director detained by PA security forces has resumed a hunger strike. Israeli settlements keep expanding despite the evacuation of a tiny “unauthorized” outpost. An advisor to Pres. Morsy says amending the peace treaty with Israel is "only a matter of time.” COMMENTARY: David Sanger says Romney's recent comments could prove problematic if he is elected president. Khaled Diab describes Palestinians and Israelis jointly visiting Israel's Holocaust Memorial. Zvi Bar'el looks at a new Israeli book about Hamas. Eitan Gilboa says Israel would be wise not to interfere in US politics. Chris McGreal says PM Netanyahu has successfully made Iran the only Middle East issue in the United States. Walid Khadduri says energy security is a priority for Israel. Hani al-Masri says restructuring the PLO is the key to Palestinian unity. David Rothkopf says Netanyahu has exposed the fallacy of an all-powerful “Israel Lobby.” Aaron David Miller asks if Romney can be trusted with Middle East policy. Tony Karon says Palestinians are used to unfair attacks such as those in the recently released Romney video.

NEWS: The IMF issues a strong warning on the state of the Palestinian economy, saying it poses a "high risk" of continued social unrest in the occupied West Bank.The PA plans to tell donors at an upcoming meeting that the economic status quo is unsustainable. Experts say the stability of the PA is gravely threatened by its ongoing financial crisis. A new Palestinian opinion poll suggests a strong link between economy and security. The New York Times profiles Israeli Amb. Michael Oren. A pro-Hamas bloc wins union elections among UNRWA employees in Gaza. In a recently released surreptitiously filmed video at a fundraiser, Mitt Romney suggests peace is almost impossible to accomplish and this is entirely the fault of the Palestinians. PLO leaders say they are looking at the possibility of canceling the Oslo agreements with Israel, as UN officials say a 2-state solution is becoming more remote. The controversy grows over Islamophobic and anti-Semitic sentiment at California universities. A Gaza-based poet remembers the Sabra and Shatila massacre. IPS profiles Palestinian Paralympians. Palestinians in Ramallah stage a peaceful protest against a controversial anti-Islam online video. Tobias Buck profiles Rawabi, the first ever planned Palestinian city. COMMENTARY: The Washington Post says it would be extremely risky for Palestinians to renew a UN bid. Yossi Verter says PM Netanyahu is perceived as campaigning on behalf of Republicans. Linda Gradstein says US-Israel tensions are exaggerated. Nathan Jeffay asks what Israel would do without the PA and Pres. Abbas. Samuel Berger worries that Romney may be adopting Netanyahu's “dangerous timetable for war.” Daniel Drezner is dismayed by Romney's videotaped comments about Israel and the Palestinians. Hussein Ibish defends his critique of Israel's new campaign on Jewish refugees and migrants from the Arab world.

NEWS: On American TV, PM Netanyahu makes the case for war against Iran. On the Jewish new year, many Israelis express concern about the possibility of war. A Hamas court sentences four Salafist extremists to death over the killing of an Italian activist. An all-female bloc is running in local Palestinian elections. Hamas claims an investigation has discovered that no Palestinians in Gaza were connected to an attack on Egyptian forces in Sinai. An Egyptian soldier is killed in a new clash with extremists in Sinai. Palestinians complain that 30 years after the massacre at the Sabra and Shatila refugee camps in Lebanon, no one has been brought to justice. Palestinian trade unions are divided over the prospect of a new strike. The EU pledges €100 million for the PA. Former Israeli military intelligence chief Yadlin says the country would need international and American support before any attack against Iran. PM Fayyad posts a protest song calling for his resignation on his own Facebook page. The BBC looks at Jewish Israeli extremists who engage in “price tag” violence. Israelis defend their campaign on Jewish refugees as a way of “counteracting” the Palestinian refugee issue. COMMENTARY: Seth Anziska says American pressure might have prevented the massacre at Sabra and Shatila. Robert Fisk recalls the massacre. Aaron David Miller says the upcoming election won't change US Middle East policy much. Hamas leader Zahhar claims Gaza is "free of occupation" and more secure than the West Bank. Former US Amb. Indyk says he thinks the US may go to war with Iran in 2013. Mya Guarnieri says Israel's mistreatment of migrants doesn't stop at the border. Pierre Klochendler looks at a home in occupied East Jerusalem divided between Palestinians and settlers. Michael Melchior claims a surprisingly wide range of Islamists are ready for peace and coexistence with Israel. Ben Sales looks at the political implications for Israel and the PA of the Palestinian economic crisis.

NEWS: An Israeli court rules in favor of settlers in a dispute over a house in occupied Hebron. PM Netanyahu denies he is trying to meddle in US electoral politics. Israelis in Tel Aviv seem unconcerned by the threat of missiles. Palestinian negotiators mourn the death of Amb. Stevens, describing him as a good and fair man. The Israeli military persists in repeatedly destroying a Bedouin village in the Negev. A small group of protesters in Gaza hold their own demonstration against an anti-Muslim film. Israeli Bedouins may join the protest movement as well. Palestinians and Israelis are taking foreigners on “dual narrative” tours of the "holy land." Palestinian families in occupied East Jerusalem decry the lack of proper schooling facilities. COMMENTARY: Eric Lewis says, for all his talk about American exceptionalism, Mitt Romney seems willing to allow Netanyahu to dictate a conflict with Iran. Charles Krauthammer says Pres. Obama has abandoned Israel. The Forward says Netanyahu has come perilously close to making Israel a US election issue. Rachel Shabi says Israel should understand the power of words, as well as weapons, in the new Middle East. JJ Goldberg draws three lessons from the controversy over Jerusalem in the DNC platform. Avi Issacharoff says West Bank protests this week demonstrated that Netanyahu's concept of “economic peace” is hollow. Ashraf al-Ajrami says, even amid protests, Palestinians must remain united. Khaled Abu Toameh says the protests were an attempt by elements within Fatah to get rid of PM Fayyad. Xinhua says 19 years after the signing of the Oslo Accords, peace between Israel and the Palestinians seems no closer. Jon Donnison says, one year after the failed UN bid, Palestinians have all but disappeared from the world stage.

NEWS: While the PA says it's canceling tax increases to meet the demands of protesters, union leaders say demonstrations will continue. Protests in Ramallah continue, and focus on criticism of Palestinian leaders, especially PM Fayyad. Israeli officials say the US has refused a request by PM Netanyahu to meet Pres. Obama next month, although the White House plays down the report. Netanyahu orders the release of Palestinian tax revenues to the cash-strapped PA. Hamas leader Hanniyeh is visiting Egypt. Six Jewish Israeli teenagers are charged in an attack on a Palestinian man in Jerusalem. Israel is ranked the second-best educated country in the OECD. Hamas sentences a man in Gaza to death for collaboration with Israel. Palestinians who have fled Syria protest against conditions in a Lebanese refugee camp. The US is reportedly attempting to dissuade Palestinians from seeking non-member observer state status at the UN in September. COMMENTARY: Daniel Levy says Israel really does have to confront the choice between continuing the occupation and becoming a single, democratic state. Saud Abu Ramadan says both a free-trade agreement with Egypt and continued smuggling through tunnels would benefit Hamas. Amira Hass says the PA serves everyone except its own public. Oudeh Basharat says Israeli journalists show more sympathy for tomatoes than they do for Arabs. Moshe Arens says the US-Israel relationship doesn't depend on individual politicians. Steve Caplan says attempts to boycott Israeli academics and scientists are hypocritical and counterproductive. Ron Kampeas says US-Israel tensions regarding Iran are boiling over. David Amitai says Israel's Jews and Arabs are united by food, if nothing else. Mairav Zonszein says a new study shows violence begets violence among Israeli and Palestinian children.

NEWS: PM Fayyad announces new economic measures in response to Palestinian protests at the rising cost of living in the occupied West Bank. The protests have focused on the PA leadership, and are beginning to turn violent, but no injuries are reported yet. Palestinian leaders are looking for ways of improving the economic situation. Pres. Abbas says Israeli restrictions are impeding an effective response to the economic crisis. The PA says it is working to facilitate the creation of an industrial zone in Jenin. Palestinians say Israel intends to confiscate land near Nablus for a new settler bypass road. Israeli officials complain about US policy towards Iran. PM Netanyahu suggests the United States has no right to restrain Israel from attacking Iran. UN officials criticize both the blockade of Gaza and rocket attacks against Israel. Israel is creating a new police unit to combat “price tag” violence against Palestinians. Hamas says it has agreed to create a joint security committee with Egypt. Israel instructs its diplomats to raise the issue of Jewish refugees from the Arab world in Israel to “counteract” the Palestinian refugee issue. India reiterates its support for Palestinian independence. Israeli and Palestinian women launch a joint business in handicrafts. The tax exempt status of the Zionist Organization of America has reportedly been revoked. COMMENTARY: Akiva Eldar says a new study demonstrates that Palestinian citizens of Israel and Palestinians living under Israeli occupation have developed separate narratives, and, in a separate column, he argues that those who have given up on the two-state solution are surrendering to defeatism. The Jerusalem Post claims that Palestinians and other Arabs are not only responsible for the Palestinian refugee problem, but also for Jewish refugees in Israel from the Arab world. Sophie Claudet and Saleh Jadallah doubt Pres. Morsy will adopt substantially new policies towards Gaza.