NEWS: Palestinians cancel national unity negotiations in Cairo, as the disagreement over the next PM continues. Israel approves 2,000 new settler housing units in occupied East Jerusalem. Hamas leaders complain about a feud within the organization’s hierarchy. Israel is the world’s fourth-largest arms exporter. Palestinian unemployment figures increase. Pres. Peres says peace with the Palestinians is urgent. Shaul Mofaz says Israel must prevent a Palestinian UN statehood bid. Anti-Palestinian initiatives are circulating in Congress. Young Palestinian children are routinely arrested by Israeli occupation forces in East Jerusalem. COMMENTARY: Thomas Friedman says the UN should update Resolution 181 and welcome Palestine as a member of the General Assembly. Victor Kattan says states, and not the UN as a body, will determine the status of Palestine. Akiva Eldar says Israelis prefer to forget the massacre at Deir Yassin. Carlo Strenger says the Israeli government is as disconnected from reality as mystics. Adel Safty says PM Netanyahu is sabotaging the peace process. Uri Avnery says Netanyahu’s rhetoric about Israel as a “Jewish state” is a trick to avoid Palestinian statehood. Bradley Burston says Israelis and Palestinians have equal rights to a home. Jackson Diehl claims Pres. Obama is “tough” on Israel but “timid” on Syria. Esther Cepeda says Gaza flotilla participants are not against Israel. Jeff Halper says the PA is making a “historic mistake” by not working enough with civil society.