NEWS: Hamas refuses to prove that a captured Israeli soldier is still alive. PM Netanyahu has said Israel will retaliate with harsher conditions for Palestinian prisoners. Palestinians say Turkey has pledged to help their UN bid. PM Netanyahu reportedly tells US officials he accepts that negotiations should be based on the 1967 borders. Palestinians also say they’re willing to soften their positions to facilitate talks. The PA fines a truck driver for distributing settlement goods. Netanyahu’s son reportedly posts disparaging remarks about Arabs on Facebook. PM Fayyad participates in a protest against the separation barrier. The EU casts doubt on Palestinian chances that the UN in September. COMMENTARY: Yoel Marcus says Israelis and Palestinians are avoiding painful compromises like children avoiding the dentist. Jeremy Ben-Ami says Israel should welcome criticism from its friends. Yehuda Ben Meir joins calls for Netanyahu to change his coalition. Al-Hayat interviews Zbigniew Brzezinski. Marwan Al Kabalan says Arabs are starting to doubt Pres. Obama’s ability to broker peace. Ha’aretz interviews EU foreign policy chief Catherine Ashton. Rana Baker says Israeli restrictions make Palestinians tourists in their own homes. Saleh Al-Naami says settlers continue to deploy violence against Palestinians with impunity. Mohsen Saleh says recent border incidents have put the right of return back on the agenda.

NEWS: Pres. Obama says the United States may have “tactical disagreements” with Israel. Pres. Abbas reiterates that Palestinians want to resume negotiations, will go to the UN in September and will have a government headed by PM Fayyad. Fayyad says he refuses to continue as prime minister, even though a new poll shows him to be the popular choice. Obama assures Jewish donors he strongly supports Israel. Settlers use tourism to tighten their grip on the occupied territories. Gazans are not feeling much relief from the border opening. Turkey and Israel hold secret talks to repair relations. PM Netanyahu says Israel must separate from the Palestinians. Outgoing Israeli military chief of staff Gabi Ashkenazi says a Palestinian state is “inevitable” and urges resuming negotiations. Former Mossad chief Meir Dagan has been stripped of his diplomatic passport after remarks critical of the Israeli government. COMMENTARY: Sefi Rachlevsky says that because of religious fanaticism, the Israeli military is leading Israel to destruction. Daoud Kuttab says Palestinians need a holistic strategy for independence. Gerald Auerbach says Israel was founded amidst a legitimacy crisis and had to fight its own extremists. Gershon Baskin says Palestinians need energy as well as political independence. Khalaf Al Habtoor says more Arab commitment to the Palestinian cause is required. Jeff Halper says even a symbolic show of support for Palestine at the UN will be a significant victory. Yossi Alpher says that rather than trying to resuscitate talks, the international community should turn UN efforts into a win-win situation. Ghassan Khatib says Europe is the key to what happens in September. Roger Hercz says Israel is torn over the Arab Spring.