NEWS: A pending Knesset bill would drop the word “democratic” from Israel self-definition and eliminate Arabic as an official language. A gruesome “honor killing” shocks Palestinians and prompts harsher penalties. New US ambassador Dan Shapiro says Pres. Obama hopes to visit Israel soon. Analysts say new settlement construction would do nothing to offset Israel's cost-of-living crisis. An Israeli parliamentary report says Palestinian violence in September is “unlikely,” but its security forces are preparing for many contingencies. The Arab League says it's finalizing plans for a UN statehood initiative, and Palestinians say their "train is headed towards New York." Gazans show no sympathy for ex-president Mubarak, now on trial in Egypt. COMMENTARY: Nicholas Kristof says the US needs a more balanced policy towards Israel and the Palestinians. Dimi Reider and Aziz Abu Sarah say the cost of living crisis in Israel is strongly linked to the occupation. Michael Jansen says Israel's economic crisis is a classic guns versus butter dilemma. Ian Bremmer says Palestinian statehood is coming and Israel and the United States will find themselves isolated. Americans for Peace Now issues “principles” for Palestinian international recognition and the UN.

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