NEWS: The Egyptian gas pipeline to Israel is again attacked. PA employees will get half pay this month. Israel continues home demolitions in the Jordan Valley. The latest Gaza flotilla is stalled. PM Netanyahu remains very popular in Israel in spite of stalled diplomacy. Israel is planning more West Bank settlements. Israeli and Palestinian security services are both preparing for possible violence in September. Clashes between Palestinians and settlers increase. Two Palestinians are killed in an Israeli attack on Gaza. US officials say Pres. Obama plans to visit Israel. Israel says it is determined to keep pressure on Hamas. Palestinian unity talks are stalled. COMMENTARY: Yitzhak Laor says the siege of Gaza is turning into a moral blockade of Israel and Ha'aretz says it must end. Zvi Bar'el says the US may move towards talks with Hamas. Gershon Baskin says leaders must change their messaging. David Newman says Palestinians and Israelis need to work to protect each other's human rights. Linda Gradstein says Israeli attitudes are still shaped by the Gaza redeployment. Eric Alterman says Israeli and Palestinian leaders are making a two-state solution impossible. Linda Heard says the flotilla was blocked by a conspiracy. Yossi Alpher says one of the reasons Palestinians are thinking about asking for UN membership is that they want progress on two states but Netanyahu does not. Ghassan Khatib says Palestinians are ready for freedom and independence.

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