The Washington Post says the PA government state building plan could provide the key to peace, the Arab News points out that no one has any better ideas, and the World Bank is donating $64 million toward the effort. Israel closes the only oil and gas terminal on the Gaza border. AFP profiles the plight of Palestinian refugees in Lebanon. Egypt says Israel is stalling on a prisoner exchange with Hamas, and may offer a new plan for Palestinian reconciliation. Jordan's Foreign Minister confirms his country's interest in the creation of a Palestinian state. Israel is ignoring 400 Palestinian home demolition appeals. A commentary in Ha'aretz says the settlement moratorium is part of a "masquerade," and the paper also interviews an extremist Jewish settler. Israeli diplomats are preparing to combat a Swedish EU initiative to recognize occupied East Jerusalem as the Palestinian capital. The Media Line profiles the new Palestinian "planned" city in the West Bank, and some Zionists around the world express outrage at the Jewish National Fund decision to donate 3,000 trees to the project. Ir Amim explains the dangers of new settlement construction in occupied East Jerusalem. The Daily Star reviews Joe Sacco's new graphic novel "Footnotes in Gaza."

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