Tax exempt US funds are used to support Israeli settlement activity. Israel outlines its new Gaza policies. Pres. Obama and PM Netanyahu meet to try to repair US-Israel relations. Israel bans Palestinian West Bank agricultural products from Jerusalem. PM Fayyad and DM Barak meet to discuss security. Robert Danin says time is running out for an agreement. The CSM says Netanyahu must offer concessions to Obama. A new report by B'Tselem says 42% of the West Bank is controlled by settlements, and Seth Freedman says many should be evacuated. The PA wraps up its store-to-store settlement goods boycott campaign. Ira Sharkansky dismisses diplomatic moves, but Hussein Ibish defends them. Palestinian officials call on the US to make decisive decisions. Akiva Eldar says Netanyahu will present unworkable “security borders” at the meeting. Numerous Gazans claim to have been used as human shields during the Gaza war. Orly Azoulay says Obama will politely tell Netanyahu the time is now for a Palestinian state. In These Times interviews Hussein Ibish. On the Ibishblog, Ibish says adroit Palestinian diplomacy has set the stage for the Netanyahu meeting.

Pres. Abbas reaches out directly to the Israeli public. Martin Indyk says Pres. Obama and PM Netanyahu are developing better working relations. Rights groups critique Israel's Gaza policies. A report from The Lancet confirms long-term health costs from the Gaza blockade. Israel proposes releasing 1000 Palestinian prisoners for Gilad Shalit. Abbas says direct talks depend on progress in indirect talks. Into the Gaza flotilla attack is likely to be more critical than expected. Obama is preparing to press Netanyahu on peace and settlements, and Israeli officials say the conversation will shape the future of the Middle East. PM Fayyad says direct negotiations are not imminent. Israel considers transferring authority over Gaza crossings to the PA. The Jerusalem Post says adroit Palestinian diplomacy has created a conundrum for Netanyahu. UK Methodists vote to boycott settlement products. Jeremy Ben-Ami and Debra DeLee say it's time for more honesty in pro-Israel advocacy. IPS profiles the new film “Budrus"about nonviolent Palestinian resistance.

Aid from the Turkish flotilla begins to arrive in Gaza. Turkish and Israeli officials resume high-level contacts. Nick Kristof says the occupation is morally repugnant. Special Envoy Mitchell welcomes the easing of the Gaza blockade. Tensions build in Silwan In occupied East Jerusalem where Palestinian homes are slated for demolition. Israel bombs three sites in Gaza. Power outages in Gaza are down to eight hours a day. Pres. Abbas gives a rare interview to Israeli media, reiterating that he is ready for direct talks if Israel clarifies its positions on borders and security. The IHH claims Gaza flotilla passengers were tortured. Larry Derfner says Israelis are not ready for peace. Ben White says Camp David proves one-on-one negotiations are hopeless and international pressure is required. A Gaza lawyer sues for the right to study in the West Bank. ATFP Pres. Ziad Asali says peace demands courage from both Palestinians and Israelis.

Tom Friedman says Palestinian economic growth in the West Bank is changing everything. Pres. Obama and the Saudi King discuss the peace process. A Hamas member who spied for Israel begs not to be deported from the United States. Under much criticism, Israel may extend the remit of the Gaza flotilla investigation. Pres. Abbas urges stronger efforts on peace. Disabled activists fight for rights in Gaza. A new poll shows Palestinians and Israelis are hopeful but cautious about peace. Projectiles fired from Gaza strike southern Israel. Bradley Burston says Israel has been taken over by tea party-like fanatics. Settlers announce an “aggressive campaign” against PM Netanyahu. The Hamas-Fatah divide is proving unbridgeable. A proposed Israeli law would outlaw all forms of boycott, including against settlement goods. DM Barak is acting more as Israel's Foreign Minister than FM Lieberman. PM Hariri calls for more rights for Palestinians in Lebanon, and Rami Khouri says the situation is shameful. Yossi Alpher says the Gaza blockade has been counterproductive.

Richard Cohen says Hamas is hurting the Palestinian cause. An Israeli court sentences a Palestinian to life in prison. 10 Jordan Valley families are given 24 hours before their homes will be demolished. Palestinian officials seek to build ties with Jewish American leaders. Palestinians say progress on security, borders and settlements are key to direct negotiations. Israeli shelling kills a Palestinian in eastern Gaza. Palestinians launch a shop-two-shop settlement goods boycott campaign. FM Lieberman says there is no chance for a Palestinian state before 2012. The US is reportedly frustrated with Israel's positions at proximity talks. Ha'aretz says the power plant issue shows Hamas does not have Gazan's best interests at heart. The Jerusalem Post profiles the head of the so-called “Islamic movement” in Israel. The Independent profiles a Palestinian man struggling to retain his Jerusalem residency. Emile Hokayem says Lebanon mistreats Palestinian refugees. PLO officials say disbanding the PA is a possibility. Ghassan Khatib and Omar Shaban both say the siege of Gaza must be lifted completely.

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.

Pres. Peres says the US should engage Hamas on peace. Israel bombs 4 sites in Gaza. Israel offers to let EU officials visit Gaza. On the fourth anniversary of the capture of Gilad Shalit, rights groups criticize Hamas' treatment of Israeli prisoners. Israeli soldiers often kill Palestinians with impunity. Aluf Benn describes the four stages of US-Israel policy disputes. Yitzhak Laor says the spirit of Kahane is alive in Israel's universities. Gideon Levy asks when the Israelis will hold PM Netanyahu to account for his policies. Israelis accuse Palestinians of “stealing” water in the occupied West Bank. Israel plans to increase trucks into Gaza by 200%. Ray Hanania praises the first planned Palestinian city in the West Bank. Antony Lerman says a lively debate has emerged about the nature of Israeli society. The Economist says Hamas is gaining ground following the flotilla debacle, and the US calls further flotillas irresponsible. Patrick Seale says that, alarmed by regional developments, Israel may be reconsidering peace with Syria.

Israeli occupation authorities authorize the demolition of 22 Palestinian homes in East Jerusalem. Pres. Abbas says such measures threaten peace. The UN calls the plan illegal and urges Israel to reconsider. The body of a Palestinian shot by Israeli soldiers is being exhumed for an autopsy. Israel will reopen the investigation into the shooting of an American protester. Abbas condemns Israeli plans to expel 4 Hamas politicians from Jerusalem. Fear of being expelled to Gaza keeps West Bank Palestinians in their homes. Hamas TV will no longer be shown in France. European MPs call for the complete lifting of the Gaza blockade. Malaysia is pressing for a wider international investigation into the flotilla attack. FM Lieberman outlines his vision of “peace,” which includes stripping citizenship from some Arabs. Israel launches a major new spy satellite. Ahmed Moor looks at how Palestinians in Lebanon are treated as second-class citizens. Michael Jansen warns there may be another Middle East war.

Israeli decision to demolish Palestinian homes in East Jerusalem draws criticism internationally and from Israeli Defense Minister Barak. Israeli settlers threaten to forcibly evict Palestinians in Jerusalem and attack Palestinians near Bethlehem. Ahead of his upcoming Washington visit, Israeli Prime Minister Netanyahu blames Palestinians for lack of progress in negotiations while his National Security Advisor questions the United States Middle East and Iran policies. Israel asks UN to shelve aid ship raid inquiry, as Balkan summit condemns raid and a Lebanese ship prepares to leave Gaza. Two articles in Bitter Lemons discuss the merits and risks of Israeli settlers remaining in a future Palestinian state.

ATFP President Dr. Ziad Asali calls for a broad national alliance in support of a two-state solution. Israeli plan to raze 22 Palestinian homes in Jerusalem is criticized by the US, defended by Jerusalem Mayor. Ghassan Khatib argues that continued settlement activity will only make it difficult find creative solutions. Editorial in The New York Times contends that Netanyahu was right in his decision to ease the Gaza blockade. Quartet maintains that the situation in Gaza is ‘unsustainable’ and ‘unacceptable’ as the international community waits to see the extent of change on the ground. PA security forces detain two top Hamas affiliates in the West Bank on Monday night. Israeli military appeals court orders the evacuation of settlers from Palestinian-own land. A Haaretz editorial outlines disparity of rights of Arab citizens of Jerusalem versus Israeli citizens. Gershon Baskin: The proximity talks must include serious discussions on the core issues – borders, security, Jerusalem and refugees.