Roger Cohen says the Middle East is starting to change. Israeli ministers reiterate determination to settle occupied East Jerusalem, call US demands "irritating." Rachel Corrie's parents persist in Israel lawsuit. Israeli troops kill Palestinian child, injure several other protesters. A new survey finds 55% of settlers are in Jerusalem. Gaza banks go on strike after Hamas gunmen seize cash in daylight heist. The PA approves $3.9 billion 2007 budget. Akiva Eldar says Israelis are suffering from a plague of darkness. Thousands attend Land Day ceremonies. A court orders more arguments on whether the PLO and the PA are liable for a Hamas terrorist attack. Israel agrees to allow a shipment of clothes and shoes into Gaza. Malcolm Hoenlein says Pres. Obama must do more to mend ties with Israel. British MPs say UK weapons not used in the occupied territories. An Israeli journalist is reportedly being held in secret house arrest for leaking details of Israeli assassinations. Ron Kampeas outlines the present state of the US-Israel confrontation, and analysts say Arab states have failed to take advantage. Tariq Alhomayed says the Arabs must not allow Iranian clients like Hamas to exploit the situation. The Arab News says Pres. Obama should make sure Israel understands the cost of its policies.

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