43 Palestinian officers are jailed, fined or demoted for abusing Hamas detainees, and PM Fayyad says past "excesses" will be halted. PM Netanyahu and other Israeli officials hint at potential for progress on negotiations, and reports suggest they oppose a "borders first" agenda. Israel approves four new settler buildings and the expansion of a Jewish religious school in occupied East Jerusalem. Israeli military officials cancel a trip to the UK for fears of arrest over human rights violations. A new "Israeli only" highway is planned in the occupied West Bank. A commentary in Ha'aretz says that a settlement freeze is in Israel's interest, and another argues for the release of jailed Fatah leader Marwan Barghouti independent of a prisoner swap with Hamas. A commentary in YNet argues in favor of boycotts and sanctions against Israel to promote peace. JTA looks at enforcement of the partial building moratorium. Jewish voices are among those protesting the siege of Gaza. Daoud Kuttab complains about the quality of Palestinian television programming for children, and says negotiations need to focus on the future of Jerusalem. Ghassan Khatib says that Israel's settlement construction and other measures over the past decade are "almost irreversible." Palestine forms a committee to seek membership in the WTO.

Rep. Mike Honda says two states are the only path to peace in the Middle East. Hamas prisoners report that abuses in Palestinian jails ceased in October. The LA Times profiles a major West Bank highway that has been closed to Palestinian traffic. Israeli opposition leader Tzipi Livni says peace is possible. Reports suggest that a new US plan envisages a Palestinian state within two years, but Israeli FM Lieberman calls this "unrealistic" and orders his diplomats not to "grovel." A Ha'aretz commentary asks settlers what kind of future they are building, and another argues there is very little difference between the occupation and apartheid. PM Fayyad looks forward to a Palestinian state free of fences and settlements, and Pres. Abbas reiterates that a settlement freeze is the precondition for renewed negotiations. A commentary in the Guardian says Israel is using water to harass Bedouins. The National says Israel is ready for another war in Gaza which is "ready to explode," and profiles bereaved physician Izzeldin Abuelaish. Hamas says it would join Hezbollah in any future conflict with Israel. Time Magazine reviews a year of Mideast missteps. Egyptian clerics quarrel over the legitimacy of Egypt's new barrier along the Gaza border.

Egypt allows 100 protesters into Gaza. 2009 saw a sharp drop in casualties in the occupied West Bank. Activists are helping civilians overcome the trauma of the Gaza war. Pres. Abbas says no effort will be spared to aid civilians in Gaza. A new report anticipates significant growth in the Palestinian economy. Ha'aretz reports that settlement construction is "booming" in the occupied West Bank, and runs a commentary saying Israel must tell settlers they can remain in a Palestinian state only as Palestinian citizens. PM Netanyahu proposes a peace summit. Authorities arrest, then release an Israeli settler in connection with last month's mosque arson. Palestinians say dramatic developments on peace are possible in the near future. The fate of jailed Fatah leader Marwan Barghouti may be key to an Israel-Hamas prisoner swap. The BBC says Gaza's economy has moved literally underground. American Jewish organizations back a former Somali official accused of human rights violations in an effort to protect Israel from lawsuits. Stalled peace talks have deepened the divide among Palestinians. The UAE manages to get humanitarian aid into Gaza. Backlash over the Gaza war has affected Israel's diplomacy. Ghassan Khatib says the two state solution is still alive, but being killed by Israeli settlement activity.

The New York Times profiles friendships between wounded Israeli and Palestinian children. A commentary in the LA Times says Palestinians and Israelis will keep killing each other in the coming year, although Israeli security forces say 2009 was a "quiet year." Israel's Deputy Foreign Minister denies there is an occupation in the occupied territories, and his government is defending 15 previously "unauthorized" settlement buildings. Hamas reportedly rejects Israel's latest prisoner swap offer. The Palestinian Bureau of Statistics says there are 10.88 million Palestinians, half of them in the diaspora. A commentary in Ha'aretz questions the Israeli government's interest in peace. Special Envoy Mitchell reportedly will propose a new formula to restart permanent status negotiations. A Jerusalem Post commentary asks how Israelis would react if they were treated like Gazans, The BBC profiles a child born during the Gaza war, and IPS offers another retrospective of the conflict. American high school students are being indoctrinated with settler ideology. The Gaza war has left Palestinian citizens of Israel disillusioned. Gaza is reportedly being slowly rebuilt. The National says that Israel should not be allowed to dictate the terms for peace. Daoud Kuttab says Pres. Obama has taken his eye off the diplomatic ball. The Jordan Times calls for international sanctions against Israel.

Israel's high court orders that a major road in the occupied West Bank be opened to Palestinian vehicles, and a Ha'aretz commentary calls it 28 km of "distilled apartheid." Israeli and Egyptian leaders meet. About 1,000 protesters from around the world gather in Egypt planning to march into the Gaza Strip. The United States sharply criticizes Israeli plans for 700 new settler buildings in occupied East Jerusalem, as plans are announced for more building in the northern West Bank as well. The LA Times reviews Joe Sacco's new graphic novel about an Israeli massacre of Palestinians in Gaza in the 1950s. Hamas threatens to try to capture more Israeli soldiers if prisoner swap talks fail, and accuses Israel of refusing to release four key prisoners. A federal judge accuses the US government of hindering a lawsuit against the PA. Former PM Sharon advisor Dov Weissglas says Israel must continue working with the PA, especially on security. The Guardian says that in spite of its rhetoric of "resistance," Hamas has essentially abandoned the strategy of armed struggle. The National says both sides learned lessons from the Gaza war last year, and that most Israelis support the war but think it ended too soon. Rami Khouri says both sides lost. The Arab News says Israel's new settlement plans show it is not interested in peace.

The LA Times says that Israel is building a barrier along its border with Egypt. Several sources look back at the Gaza war one year on, as Hamas says it's ready for another conflict. Reports suggest that Hamas may be flexible on the deportation of released prisoners, and Ha'aretz says that it is likely to accept Israel's latest offer. Israeli cabinet minister Binyamin Ben-Eliezer says that jailed Fatah leader Marwan Barghouti should be released, but not in the context of a deal with Hamas. A leadership battle threatens to split Israel's Kadima party. A UN official accuses the international community of the "tragic" failure in Gaza. A YNet commentary says that settlers are on a collision course with mainstream Israeli society. More young Israelis pledge to disobey orders to evacuate settlements. West Bank shepherds say their livelihood is threatened by drought and occupation. The Guardian reports on Christmas in Bethlehem under the shadow of the separation barrier, as Palestinian Christians from Gaza pray for peace. Neve Gordon says Israel is determined to break nonviolent Palestinian resistance in the occupied West Bank.

Israel and the Vatican fail to resolve an ongoing dispute over a site in occupied East Jerusalem at which the "Last Supper" is reputed to have taken place. The LA Times says Israel's partial settlement freeze is not perfect but could form the basis for progress on peace. Reports differ over what is delaying an Israel-Hamas prisoner exchange, including a dispute over key prisoners, the possibility of deportation of some, and a bitter dispute between Israeli civilian and military leaders. The Christian Science Monitor says in any event an agreement will not end the siege of Gaza. Jerusalem's Latin patriarch denounces the occupation. Palestinians west of the separation barrier report ongoing settlement construction. Israeli prosecutors indict the leader of nonviolent resistance to the barrier for incitement, and a commentary in Ha'aretz says Israel is waging a war of attrition against nonviolent resistance to the occupation. A Cambridge University choir is split over a possible boycott of Israel. Palestinians say Israel is cutting Bethlehem off to tourists. Asharq Al-Awsat conducts a lengthy interview with Pres. Abbas.

In an interview with the Wall Street Journal, Pres. Abbas says as long as he is in office there will be no third intifada. The PA says it will investigate allegations that Israel harvested organs from Palestinians without consent in the late 80s and 90s. Negotiations continue on a possible prisoner swap between Hamas and Israel, which is reportedly considering deporting some "heavy prisoners." A new Israeli school curriculum about pre-state Jewish terrorist groups draws controversy. Israel bans the head of the "Islamic movement" organization from Jerusalem. International aid groups say the world has abandoned the people of Gaza, and a Jerusalem Post commentary says Israel's policies are radicalizing the population. A senior Palestinian official accuses PM Netanyahu of wasting time on peace.The Guardian runs commentaries calling for dismantling the separation barrier, ending the siege of Gaza and investigating reported complicity of Israeli doctors in torture. Former Pres. Carter apologizes to the Jewish community. Palestinian smugglers scoff at a new Egyptian underground barrier on the Gaza border. Aaron Miller says Pres. Obama needs to have foreign policy goals that are achievable, and Yossi Alpher says that it is in Israel's interest for Palestinians to develop a better grasp of Washington politics. Former AIPAC staff member Steven Rosen says that PM Netanyahu and Special Envoy Mitchell have agreed on Terms of Reference for peace negotiations that include the future status of Jerusalem among other issues.

An underground barrier being constructed by Egypt along the border with Gaza comes under heavy criticism. A prisoner swap between Israel and Hamas continues to be negotiated. An American-style college program has opened for Palestinians in the occupied West Bank. Extremist rabbis from government-affiliated religious institutions continue to urge Israeli soldiers to disobey orders. Israel has jailed the leader of the nonviolent Stop The Wall campaign. Pres. Abbas says he's not optimistic about peace. A commentary in Ha'aretz says the Israeli peace camp needs to focus on a return to the 1967 borders, and another in YNet says that Israel is squandering an opportunity to make peace with the best Palestinian partners it has ever had. A Labor MK and former cabinet minister calls for a new American peace initiative to replace the Roadmap. Former Pres. Carter calls for the rebuilding of Gaza. A former Bush speechwriter says politicians from the religious right like Palin and Huckabee will find their encouragement of settlements has consequences. Leonard Fein expresses doubts about PM Netanyahu's intentions on peace. A new Palestinian opinion poll shows Pres. Abbas would beat Hamas leader Hanniyeh by 16 points in a new election. IPS reports that Europe's ties with Israel remained close in spite of recent tensions.

Israeli police seek to detain the organizers of a Palestinian cultural event in occupied East Jerusalem, and Pres. Abbas warns that Israel is seeking to expel Palestinians from the city. A UN official warns that there is a race against time on Middle East peace and confirms that the settlement moratorium fall short of what is required from Israel. Israeli troops claim they were fired on near Hebron in the occupied West Bank, and Egyptians claim to have been fired on from Gaza. Israeli FM Lieberman vows Israel will resume settlement building "in full force" after 10 months. A Ha'aretz editorial says Israel should pick up where PM Olmert left off on peace. Reports suggest Israel will give its latest response on a prisoner exchange with Hamas on Sunday. Israeli settlers used dogs to keep Palestinians from their own properties. The Guardian reports that CIA operatives are working with Palestinian police accused of abuses. The Forward reports that the United States is helping Israel keep a qualitative military edge over any potential adversaries. Several commentaries examine ways forward on peace talks, and Martin Indyk suggests an Israeli withdrawal to pre-intifada lines to facilitate Palestinian state building.