NEWS: FM Lieberman invokes the specter of Nazi-ism in criticizing Europe's stance towards Israel's settlement expansion policies. Israeli occupation forces clash with Palestinian protesters near Hebron, with a Palestinian youth killed. Sales of a perfume named after a rocket soar in Gaza. An extremist party is banned from campaigning in Israel on the grounds that it is too racist against Arabs. A senior PLO official says there won't be any new peace initiative until after the Israeli election. Pres. Abbas and Hamas leader Mishaal discuss reconciliation in a phone call. Abbas criticizes Hamas for not recognizing Israel and reminds them this was part of an earlier PLO-Hamas agreement. Palestinian labor leaders shut down UNRWA offices following layoffs and reduction of services. Hamas says it is going to start rebuilding its ministries and headquarters destroyed by Israel in the recent conflict. Palestinians in the occupied West Bank are developing rooftop gardens to grow food. Palestine's anti-corruption commission hopes to use international legal mechanisms in future prosecutions. The Gaza conflict is deterring Christmas religious tourism in Bethlehem. COMMENTARY: Carlo Strenger joins the chorus of voices saying Mishaal's Gaza speech played directly into the hands of PM Netanyahu. Douglas Bloomfield says while Mishaal openly opposes peace, Netanyahu and Abbas have policies that also undermine it. Abdullah Iskandar says Israel is deliberately keeping both Hamas and the PA weak and divided in order to rule over them. Yaron Ezrahi says the recent UN vote was an important turning point, reminiscent of what Israelis achieved in 1947. Yaakov Livne says Israel desperately needs better diplomacy. Rob Eshman says he's joined those who tire of hearing about a two-state solution. Jerome Segal says a more effective Arab Peace Initiative would center on the Israeli and Arab peoples, rather than their governments.

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