NEWS: Israel's plans to expand the highly sensitive and controversial E1 settlement area threatens to cut off East Jerusalem from the rest of the occupied West Bank, and reportedly "shocked" the United States. Israeli officials reportedly say they only improved planning, not building, in E1, but commitments not to build in the area made to the US are nonetheless "no longer relevant." Israel also says it will "retaliate" by withholding millions of dollars in Palestinian tax revenues. The Israeli announcement poses a familiar challenge to Pres. Obama. EU states, including Britain and France, voice extreme displeasure over the move and may take additional diplomatic action. UNSG Ban says the plans could be a "fatal blow" to a two-state solution. PM Netanyahu dismisses international criticism. Despite euphoria over the UN vote, Palestinians still face the same challenges. Suspected collaborators in Gaza face a grisly fate. Gaza fishermen struggle despite slightly eased restrictions. A Palestinian man attacks occupation forces in the West Bank. Gaza smuggling tunnels are operating effectively again in the aftermath of the conflict with Israel. Israeli settlers in occupied East Jerusalem seize control of a five-story house. The World Bank announces a $6.4 million effort to save the water system in Gaza. A surge of support for Hamas in Gaza following the conflict with Israel is already beginning to fade. COMMENTARY: B'Tselem looks at the E1 settlement expansion plan and its implications for human rights in the occupied West Bank. The Jerusalem Post defends the plan. Meir Javedanfar says the E1 plan creates the very diplomatic crisis for Israel that Iran failed to create. Barak Ravid says punitive measures aimed at the Palestinians also hurt Israel. A.B. Yehoshua says it's time for Israel to talk to Hamas. Yehuda Ben Meir says the recent UN vote was mainly an international protest against Israel's settlement policies. Mouin Rabbani says Palestinians will have to work hard to make sure the UN vote is not purely symbolic. Raghida Dergham looks at the strategy behind the Palestinian UN initiative. William Saletan says Israel is losing friends by insulting everyone's intelligence. John Bell says after the Gaza war, Palestine has again become a central Arab concern. Matt Duss looks at a recent Washington event featuring PM Fayyad. Mark Baker looks at why Australia abstained at the UN. Hussein Ibish explains how Israel lost almost all European support at the UN. David Remnick describes his interview with Fayyad.

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