Israel resumes negotiations with Hamas over a prisoner swap. Israeli settlement building surges, although Israeli officials claimed to be restraining thousands of other new units. Pres. Abbas says PM Netanyahu fears a collapse of his government. An Israeli soldier is jailed for looting following the flotilla attack. The Moroccan king refuses to meet the Israeli president. Abbas says Palestinians will renounce all further claims upon independence. One Palestinian is killed in Israeli air strikes on Gaza. Gaza children place messages to the world in cork boats. Ha'aretz says settlement building in Jerusalem is intended to destroy the peace process. Akiva Eldar says the Israeli right is not making Israel more Jewish, but is making its Palestinian citizens more Palestinian. Michael Herzog says Israel is torn between its “Jewish” and its “democratic” characters. Mudar Zahran says Arab states must do more for peace. The Jerusalem Post asks if the PA is capable of independence. Raghida Dergham says Israel and Iran benefit from their rivalry at the Arabs' expense. The Arab News says there is no connection between settlement activity and Israel's “Jewish character.”

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