NEWS: Israel blocks air travel to a Palestinian conference. The Middle East Quartet will meet Monday to try to fend off a looming diplomatic crisis. Pres. Abbas says the PA may not be able to meet payroll next month. PM Fayyad says the PA is committed to protecting Palestine from settlers. Testimony ends in the Rachel Corrie trial. Israelis are pressing legislation criminalizing boycotting settlements. The Ma’an office in Gaza is firebombed. Palestinians await the outcome of the Quartet meeting. Israel sees the “flytilla” as a rare media and diplomatic victory. UNRWA changes its name to “the UN Agency for Palestinian Refugees,” but promises no change of mission. COMMENTARY: Ephraim Sneh, former Israeli Minister of Defense, calls on Israel to embrace American proposals and become an active member of the peace process in the Middle East.Akiva Eldar says PM Netanyahu has turned all critics into Israel-haters. Ha’aretz says growing tensions between Palestinians and settlers recall the early days of the second intifada. Cindy Corrie says the US is complicit in the Gaza blockade. Charles Glass says South Sudan shows Palestinians gaining independence is the easy part. The National says settlements and settler violence are a timebomb. Mostafa Zein says French supporters of Israel are exploiting the Syrian opposition. The Gulf News asks why Israel is so terrified of foreign activists. The Arab News says it’s time to end the Gaza blockade. Uri Avnery says Israel is only the latest society to succumb to complete paranoia.

NEWS: After meeting with US officials, PLO officials say they are still intent on a UN initiative, but add this does not contradict the peace process. A PA report says settler violence against Palestinians increased "dramatically" in June. UNRWA insists its name has not changed. Israeli police deploy to meet a pro-Palestinian "flytilla." The PA eliminates immunity for ministers in a corruption probe. Hamas arrests another male hairdresser. Arabs and Israelis quarrel at an international water conference. Israel and Turkey are reportedly negotiating about a UN report on last year's flotilla. EU officials say the July Quartet meeting will try to develop the framework for new talks. COMMENTARY: Amira Hass says Israel's response to the flotillas is self-defeating. Larry Derfner says that flotillas should be supported despite their flaws, but D. Bloomfield says the whole thing is pointless. Ruqaya Izzidien says flotilla solidarity is more important than aid cargo. Leonard Fein says rather than just opposing Palestinian UN initiatives, the US should craft a compromise resolution. Michael Jansen says Palestinians should push the West to change its peace approach. Tony Karon questions the idea that Israel is the "national home of the Jewish people." Daniel Kurtzer says the role of mediators is crucial. Nizar Farsakh profiles the role of Quartet mediator James Wolfensohn in the Gaza redeployment. Ron Pundak looks at lessons from Oslo mediation. Aaron David Miller says chances of a negotiating breakthrough in the short run are slim.