Palestinians commemorate the fifth anniversary of the death of Pres. Arafat, and debate the possibility of a unilateral declaration of statehood. Hamas reiterates that it will never negotiate with Israel, and bans all public commemorations in Gaza of Arafat's death. Tony Blair welcomes the latest economic progress in the West Bank, while the New York Times profiles the struggle of Gaza shopkeepers. White House officials express disappointment at the meeting between Pres. Obama and PM Netanyahu. Israeli military intelligence is re-examining the notorious "Lavon Affair" of the 1950s in which Israel plotted terrorist attacks against Western targets in Egypt. The JTA argues that Obama has quietly adopted Israel's position on negotiations without preconditions. In Bitter Lemons, Ghassan Khatib explains that a settlement freeze is crucial to peace negotiations. On the Washington Post website, Hussein Ibish tries to explain the frustrations of the Palestinian leadership and people.

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