• EU to Boost Status of Palestinian Diplomats; U.S. to Oppose Anti-Israel UN Resolution - Adrian Blomfield
  Britain is preparing to confer diplomatic status on the Palestinian delegation in London for the first time, renewing fears in Israel that Europe is moving closer to recognizing an independent Palestinian state. The Foreign Office confirmed it was studying a proposal that would see Palestinian "general delegations" upgraded to "diplomatic missions" in a number of European capitals.
      The move was immediately denounced by the Israeli government, which accused Britain and its European allies of undermining the peace process. "This is really sending the wrong message and I think the Europeans should worry about the consequences of this," said Yigal Palmor, a spokesman for the Israeli Foreign Ministry. "This will certainly not encourage the Palestinians to return to direct talks."
      The Palestinians were rebuffed on a more important front after Washington told Arab states it would oppose any efforts to introduce a UN Security Council resolution calling on Israel to halt settlement construction. (Telegraph-UK)
• U.S. Tightens Pinch on Iran's Finances, Shipping
  The U.S. Treasury Department announced on Tuesday it was targeting financial networks that support the Islamic Revolutionary Guard Corps (IRGC) and the Islamic Republic of Iran Shipping Lines (IRISL). "Both the IRGC and IRISL are major institutional participants in Iran's illegal conduct and in its attempts to evade sanctions," said Stuart Levey, Treasury's undersecretary for terrorism and financial intelligence. The Treasury order named two Iranian banks - Ansar Bank and Mehr Bank - as supporters of the IRGC and said it was banning them from participating in U.S. financial and commercial systems and barring U.S. citizens from any dealing with them. (Reuters)
• WikiLeaks: Lamb Sales Behind New Zealand's "Flap" with Israel - Richard Adams
  The arrest and conviction in 2004 of two Israeli citizens who were caught using a false identity to apply for a New Zealand passport caused a serious rift between New Zealand and Israel. But U.S. officials in Wellington told their colleagues in Washington that New Zealand was merely trying to bolster its exports to Arab states.
      A confidential cable written in July 2004, after New Zealand imposed diplomatic sanctions against Israel, comments: "The GoNZ [government of New Zealand] has little to lose by such stringent action, with limited contact and trade with Israel, and possibly something to gain in the Arab world, as the GoNZ is establishing an embassy in Egypt and actively pursuing trade with Arab states." A cable two days later said: "Its overly strong reaction to Israel over this issue suggests the GNZ sees this flap as an opportunity to bolster its credibility with the Arab community, and by doing so, perhaps, help NZ lamb and other products gain greater access to a larger and more lucrative market."  (Guardian-UK)

• Israel Submits Complaint to UN on Continued Attacks from Gaza
  Israeli Ambassador to the UN Meron Reuben on Tuesday filed a complaint with the Security Council following a series of rocket attacks on Israel. "The incidents of the past several days are part of an escalation of terrorist attacks emanating from Gaza that target Israeli civilians, towns, and military personnel. Israel holds the de facto authority in the Gaza Strip completely responsible for all of these incidents, which are carried out in clear violation of international law. In response to such attacks, Israel has exercised and will continue to exercise its right to self-defense."
      "With the intention of preventing the continued escalation of conflict, the Security Council, the Secretary-General, and the international community must send a clear and resolute message that these attacks are unacceptable. In addition, the Security Council must give appropriate attention to the smuggling of arms into Gaza, which continues to fuel violence and instability in our region - in violation of numerous Security Council resolutions."  (Israel Ministry of Foreign Affairs)
• Escalation on the Gaza Border - Avi Issacharoff and Amos Harel
  Hamas is trying to change the rules of the game on the Gaza border, Israeli officials say. The escalation involves Palestinian attacks against IDF patrols and increased firing of mortars and Kassam rockets. Hamas itself is playing a limited role in these attacks. Israel intends to compel Hamas to return to the state of affairs after the Gaza offensive in which Hamas restrained itself and other Palestinian groups from operations against Israel.
      Skirmishes are likely to continue in the days ahead. This year, some 180 rockets and mortar shells fired by Palestinians have landed in Israel (and more than 200 shells and rockets landed by accident in Gaza). (Ha'aretz)
      See also Gaza Deterrence Seen Eroding - Ron Ben-Yishai
  For the first time in a long while, Hamas is playing an active role in firing rockets and mortar shells at Israeli communities. Beyond this, it does not restrain the Islamic Jihad and Popular Resistance Committees as it did in the past. Two years have elapsed since Israel's Gaza operation and Israeli officials estimate that its deterrent effect has been eroded as result. (Ynet News)
      See also Gaza Anti-Tank Missile Penetrated IDF Tank - Jonathan Lis
  IDF Chief of Staff Lt.-Gen. Gabi Ashkenazi told the Knesset Foreign Affairs and Defense Committee Tuesday: "On Dec. 6, a Kornet rocket was fired for the first time and hit an IDF tank and penetrated its outer shell," but failed to detonate. "It is a heavy missile and one of the most dangerous in the region, which was also fired toward the IDF during the Lebanon War."  (Ha'aretz)

• Wooing the Gods of the Peace Process - Aaron David Miller
  The arc of President Barack Obama's peace process efforts is leading inexorably to American "bridging" proposals - ideas on the core issues meant to literally bridge the gaps between Israeli and Palestinian positions - if not a U.S. plan to reach a framework accord on all the big issues. Obama will be told four things by those who are pushing him to be bold and decisive. First, the parties were "this close" to an accord at the last Camp David summit in 2000. Second, that a tremendous amount of work has been done in the past 10 years by Israelis and Palestinians on the core issues which have brought the parties closer than they've ever been. Third, that everyone knows the broad outlines of an agreement. And, fourth, that trying and failing is better than not having tried at all.
      Myth merges uneasily with fact here, and bad analysis and logical lapses seem to rule the day. First, on no issue were the two sides "this close" or even nearly so at Camp David in 2000. Second, a great deal of work has been done on the core issues - but by negotiators who risked very little because they were unempowered to negotiate. Third, the fact that we have a better idea of what a solution might be in no way makes it easier to get there. And, fourth, as for the old college try, failure costs, and sometimes it makes matters worse. The writer is a public policy scholar at the Woodrow Wilson International Center for Scholars. (Foreign Policy)
      See also Obama's Peace Process Optimism Based on Falsehoods - Jennifer Rubin
  Obama's belief that his personal presence would galvanize the parties; the assumption that Mahmoud Abbas was empowered and willing to recognize the Jewish state; the Obama team's conviction that a settlement freeze would pave the way to a deal; the notion that by showing "daylight" between the U.S. and Israel, we would be more effective peace brokers; and the assertion that this was the top priority for the Arab states - all were false. (Washington Post)
• Energy Policy in Iran Leaves Many Gasping - William Yong
  A dense and noxious wall of smog has only rarely lifted from Tehran during the past two months. The smog may have been of Iran's own making, as officials ordered at least five of the country's major petrochemical plants to switch production to gasoline after Western pressure led many of the world's top refining companies to cut off Iran's imports. Iran's new supply of domestic gasoline may contain high levels of aromatics which when burned in car engines produces exhaust packed with high concentrations of "particulates" that, added to the typical smog caused by nitrous oxides and ozone, can cause a range of health problems. Last month, Health Minister Marzieh Vahid-Dastjerdi reported a 30% increase in pollution-related health problems. (New York Times)

The PA's Choice: Palestinian State or Palestinian Cause - Ben S. Cohen (Huffington Post)

• In less than two decades of existence, the PA has received tens of billions in aid from the EU, the U.S., Japan, Canada and other democracies.
• Yet recall the record of successive U.S.-sponsored negotiations. First the PA plays hard to get, then it dismisses serious offers from the Israeli side as not really offers at all. Then it makes threats. The key here is how the PA plays the image of powerlessness to its advantage.
• Negotiations would have resulted in a Palestinian state as much as a decade ago, but the unwillingness of Palestinian leaders to compromise on final status issues habitually confounds anything more than an interim agreement.
• Yet a real state can only happen through an agreement with Israel. Ultimately, the PA has a choice: either a Palestinian state or a Palestinian cause.
  
  The writer is Associate Director of Communications at the American Jewish Committee.