NEWS: Israeli society is divided over free-speech rights. Gaza border violence is another major challenge to Palestinian statehood. Two Palestinians are killed by occupation forces in the West Bank. The PA says it will pay its employees full salaries starting Tuesday. One Lebanese soldier dies in an exchange of fire with Israeli troops at the border. PM Netanyahu says he's working with the United States to try to restart diplomacy. Israel plans to build another separation wall, this time in the Golan Heights. The “Palestinian Popular Committees” plan a civil disobedience campaign in the occupied territories for September. Fatah leader Mohammad Dahlan launches a barrage of accusations against Pres. Abbas. Palestinians in Lebanon voice growing support for Syrian protesters. COMMENTARY: ATFP President Ziad J. Asali urges the parties to find a compromise at the UN. Amira Hass interviews economist Raja Khalidi. Edgar Bronfman and Adam R. Bronfman say Netanyahu should go to Ramallah on a peace mission. Raghida Dergham says the atmosphere at the UN on the Middle East is starting to resemble the Cold War era. Charles Hawley looks at connections between the Israeli and European ultra-right. The Gulf News says Dahlan should be fully prosecuted. Dominique Moisi says Israel is much more economically fragile than it appears. Trudy Rubin says Israeli insiders are concerned about the drift away from 2-state discussions. Xelena Gonzalez says Israel's water discrimination in the occupied territories is disgraceful.

NEWS: A growing economic crisis is coloring all Palestinian policies. Pres. Abbas says he’s not deterred by US threats over a UN statehood bid, and calls for Palestinian rallies in support. Palestinian security forces raid the home of former Fatah leader Muhammad Dahlan. Palestinian electoral officials say municipal voting will only be held in the West Bank in October because Hamas refuses to cooperate in Gaza. Palestinians say Israel is destroying ancient cisterns in the occupied territories. Israeli-Palestinian commerce is continuing but may be threatened. A US government report recommends ending loan guarantees to Israel. Palestinian citizens of Israel debate National Service. The terrorist outrage in Norway focuses attention on outreach to Israel by extreme right-wing elements in the West. An appropriations bill pending in Congress might shut down the PLO mission in Washington. Gaza filmmakers denounce Hamas censorship. COMMENTARY: D. Bloomfield asks if Abbas’ policies are setting up a third intifada. Tariq Alhomayed says Hezbollah leader Nasrallah has effectively recognized Israel. George Hishmeh says Israel is facing international isolation. Daoud Kuttab says the Palestinian march towards the UN may be unstoppable, although what form it will take remains undecided. Michael Jansen looks at the history of the American Colony Hotel in occupied East Jerusalem. MK Ahmad Tibi says the new Israeli boycott law is antidemocratic. Allison Hoffman says the US budget impasse is reminiscent of the Israeli-Palestinian diplomatic deadlock. Natasha Mozgovaya says Israel and the Palestinians are still the focus of great attention in Washington. Olga Gershenson looks at a new film questioning Israel’s legal structures in the occupied territories. Hussein Ibish traces the evolution of Syrian policy towards Palestine and the Palestinians.