Palestinians complain Israel is diverting water to settlers in the occupied territories. Jailed Fatah leader Marwan Barghouti calls for popular and diplomatic action to combat the occupation, and some others are speaking openly about the prospect of a third intifada. Reuters examines the state of the peace process. The Sydney Morning Herald says Jerusalem is the key to peace, and a Palestinian MK warns that Israel is planning 15,000 new settlement units in the occupied city. The US expresses concern over Israel's arrest of five Palestinian intelligence officers. Palestine is allocated a postal code by the Universal Postal Union. Pres. Abbas says Israel is conducting secret talks with Hamas about a possible temporary Palestinian state. Ynet argues that Israel does not face a demographic "threat" from Palestinians. PM Netanyahu says that despite growing doubts about his intentions, he wants a final status agreement. Pro-settler soldiers in the Israeli military threaten mutiny.

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