Israeli-Turkish trade remains brisk in spite of tensions. Settlers turn to violence during the dismantling of an unauthorized outpost. Israeli forces demolish rebuilt Palestinian structures in the Jordan Valley. The PA Telecommunications Minister apologizes for harassment of TV and radio stations in Nablus. Israel arrests three Arabs accused of espionage for Syria. Hamas again denounces direct negotiations. Pres. Mubarak remains at the center of efforts to establish direct talks including a phone call with Pres. Obama, and Palestinians say negotiations on terms of reference are proceeding. PM Netanyahu vows to retaliate against Hamas for recent rocket attacks. Israeli police suspect an accused Jewish terrorist was part of a larger cell. Palestinian leaders in Israel threaten a national strike over discriminatory budget cuts, and a new study finds at-risk Arab students receive much less funding than Jewish ones. D. Bloomfield says Pres. Abbas' hesitation greatly assists Netanyahu. Gaza human rights groups blame Hamas for a large explosion. Israel plans to fight international isolation. Abdul Rahman Al-Rashed says Abbas must make some tough decisions. Michael Jansen says direct talks could be a trap for the Palestinians.

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