The family of captured Israeli soldier Gilad Shalit campaigns for his release. The New York Times interviews Israeli opposition leader Tzipi Livni. Israeli Amb. Oren says that he did speak of a tectonic shift in US Israel relations, but not a “rift.” Palestinian feminists say women's rights are being eroded by Hamas rule in Gaza, and human rights agencies warn of a generalized assault on civil liberties. Pres. Abbas says Palestinians are waiting for diplomatic answers. Gaza banks are closing following another daylight raid by Hamas gunmen. Palestinian extremists again attack a UN summer camp in Gaza. Israel's official inquiry into the flotilla attack begins, but The Arab News says it has something to hide. Palestinian women in the West Bank take up motor racing. Turkey closes its airspace to Israel. An Israeli committee is considering major settlement expansion in Arab areas of occupied East Jerusalem, and construction has reportedly begun in Sheikh Jarrah. Akiva Eldar says Israel refuses to recognize the importance of the Arab Peace Initiative. The UN says squabbling between Hamas and the PA led to the shutdown of Gaza's only power plant. Seth Freeman looks at the difficulties of Palestinians traveling in Israel. Palestinian refugees rally for their rights in Lebanon. The National says Israel must recognize peace requires actual compromises. Diana Mukkaled says the politics of the flotillas are often not what they appear.

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