• U.S. Warns Iran to Keep Strait of Hormuz Open
  U.S. Defense Secretary Leon Panetta warned Iran on Sunday that any attempt to carry out its threat to choke off the world's oil supply by closing the Strait of Hormuz would draw a quick U.S. military response. "We made very clear that the United States will not tolerate the blocking of the Strait of Hormuz," Panetta said. "That's another red line for us and we will respond to them."
      Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, acknowledged that the Iranians could block tanker traffic "for a period of time." "We've invested in capabilities to ensure that if that happens, we can defeat that," Dempsey said. "But we would take action and reopen the strait."
      Panetta also said the U.S. would consider it a "red line" if Iran begins to develop a nuclear weapon. "I think they need to know that...if they take that step, that they're going to get stopped," Panetta said. "Are they trying to develop a nuclear weapon? No," Panetta said. "But we know that they're trying to develop a nuclear capability. And that's what concerns us. And our red line to Iran is, 'Do not develop a nuclear weapon.'"  (Los Angeles Times)
      See also West Readies Oil Plan in Case of Iran Crisis - Peg Mackey and Richard Mably
  Western powers this week readied a contingency plan to tap emergency stockpiles to replace nearly all the Gulf oil that would be lost if Iran blocks the Strait of Hormuz, industry sources and diplomats said. Senior executives of the International Energy Agency (IEA) discussed on Thursday a plan to release up to 14 million barrels per day (bpd) of government-owned oil stored in the U.S., Europe, Japan and elsewhere. "This would form a necessary and sensible response to a closure of the strait," a European diplomat said. (Reuters)
• Report: Uranium Enrichment Begins at New Iranian Site
  "Iran has begun uranium enrichment at the Fordow facility" in Qom province, where Iran says it has 3,000 centrifuges in operation, the semiofficial Kayhan newspaper said Sunday. "Fordow is located deep inside mountains and due to its location is immune to any military attack," the article said. "Locating the 20% enrichment facility at Fordow means that the military threat option against Iran's nuclear program will be removed from the table forever and the West will be forced to slowly realize the immunity of this program against any foreign threat."  (CNN)
• Hamas: Palestinian Cause Is Winning Due to Arab Spring - Evgeny Lebedev
  Ismail Haniyeh, the Hamas prime minister of Gaza, said in an interview published Saturday: "The Palestinian cause is winning....With the Muslim Brotherhood part of the government [in Egypt], they [the Egyptians] will not besiege Gaza. They will not arrest Palestinians. They will not give cover to Israel to launch a war."
      "Israel is in a security situation they have never been in before. The Palestinians are winning more than anybody else due to what's happening in the Arab countries."  (Independent-UK)

• Muslim Brotherhood Says Will Not Honor Peace Treaty with Israel - Daniel Siryoti and Eli Leon
  The deputy head of the Muslim Brotherhood's Freedom and Justice Party, Essam Arian, told Al-Hayat Saturday in an interview: "We never promised that we would honor the peace treaty with Israel. The treaty is not sacred and we can and should make changes in it." His remarks denied those made by U.S. State Department Spokeswoman Victoria Nuland that the Islamist group made guarantees to the U.S. that it would continue to respect Egypt's peace treaty with Israel. (Israel Hayom)
      See also U.S. Reaches Out to Egypt's Muslim Brotherhood - Lachlan Carmichael
  A once reluctant U.S. is reaching out to the Muslim Brotherhood in a nod to Egypt's new political reality, but concerns linger about the group's attitude toward minorities, women and the peace treaty with Israel. "It's clear that they (the Brotherhood) are now the only game in town," said Marina Ottaway, who heads the Middle East program in Washington for the Carnegie Endowment for International Peace.
      Nathan Brown, a George Washington University professor, said the Brotherhood has "given just enough in terms of reassuring signals to slightly raise the comfort level with them in the U.S." But Brown noted there remains "a big foreign policy concern" about the Brotherhood's attitude to the peace treaty with Israel. "On that score, the Brotherhood has kind of given reassuring signals but at this point they're fairly general," he said, adding: "The Brotherhood, as an organization, is close to Hamas (in Gaza) and hostile to Israel."
      Shibley Telhami, a University of Maryland professor, said if Israel launches a military operation in Gaza like the one in December 2008, an Egypt under the Brotherhood's sway could take a "far more aggressive" stance toward Israel. (AFP)
• Israel Thwarts Major Terror Attack in West Bank - Yaakov Katz
  Four Palestinians were arrested at the Salem Crossing near Jenin in the northern West Bank on Sunday. They were last in line to enter the Samaria Military Court when an IDF soldier spotted wires protruding from under one man's jacket. The soldiers discovered that he was carrying three pipe bombs on his body. Another eight were discovered in his bag together with a homemade pistol, several bullets and a commando knife. (Jerusalem Post)

• Iran Spits Nails as Sanctions Bite - Walter Russell Mead
  Iran is rolling out one defiant step after another. It also seems to be stepping up its efforts to forge relationships with some Latin American countries whose leaders are not overly fond of the U.S. This looks like the defiance of a cornered animal rather than the insolence of a rising power. Iran's chief regional ally, Syria, continues to disintegrate. Hamas is shifting from a Syria-Iran alliance toward one with Turkey and possibly Egypt. The rial continues to fall as sanctions hit the weak economy.
      The wisest course for the U.S. would appear to be to continue ratcheting up sanctions, watch for danger signs in Iranian-Latin dealings, strengthen the coalition, increase the direct pressure on Tehran and press for the overthrow of the Assad regime in Syria. Tehran is off balance and flailing; the Supreme Leader is not as happy with President Ahmadinejad as he once was and the fissures in the Iranian ruling elite seem to be widening. The U.S. goal of stopping the Iranian nuclear program without war remains a stretch, but the U.S. position continues to improve while Iran's options narrow. (American Interest)
• How to Unfreeze a Middle East Stalemate - Dennis Ross
  Palestinian President Mahmoud Abbas is convinced that this Israeli government cannot make a peace deal - or at least one he can live with - so he imposes conditions on negotiations. Israeli Prime Minister Benjamin Netanyahu sees these conditions as harsh and unprecedented, and doesn't want to pay a steep political price just to enter talks. There should be no illusions about the prospects of a breakthrough any time soon. The psychological gaps between the parties make it hard to resolve their differences and have bedeviled all the work for peace talks over the past few years.
      While there may be no early breakthrough on holding negotiations, one way to overcome the stalemate is for the Israelis to change the realities on the ground. One meaningful step would be either to stop all Israeli military incursions in Area A or, if there are continuing security concerns, to phase them out based on the security situation. Gabi Ashkenazi, former chief of staff of the IDF, has consistently said that "as the Palestinians do more on security, we will do less." Dennis Ross, counselor at the Washington Institute for Near East Policy, served as a special assistant to President Obama and a senior director on the National Security Council staff from July 2009 to December 2011. (Washington Post)
• Ex-Pakistani President: Establish Ties with Israel - Qasim Nauman
  Pakistan should consider establishing ties with Israel, said exiled former Pakistani President Pervez Musharraf. Musharraf, who resigned in 2008 in disgrace, has said he plans to return to Pakistan this month, despite possible arrest, in order to participate in a parliamentary election due by 2013. Speaking in favor of relations with Israel could make Musharraf more unpopular, especially among militants who made several attempts on his life with bombings because of his support for the U.S. "war on terror" following the 9/11 attacks. Those same groups want the destruction of Israel.
      "There is nothing to lose by trying to get on Israel's good side," Musharraf, a former army chief, told Ha'aretz in an interview. "Pakistan also needs to keep readjusting its diplomatic stand toward Israel based on the mere fact that it exists and is not going away." "We have been anti-Israel in Pakistan because of Palestine....But I believe in realism and in assessing ground realities." Pakistan and Israel have maintained covert contacts for decades, officials have said. (Reuters)
      See also Interview with Former Pakistani President Musharraf - Danna Harman (Ha'aretz)

Will Palestinian Reconciliation Lead to a Hamas Takeover of the PLO? - Jonathan D. Halevi (Institute for Contemporary Affairs-Jerusalem Center for Public Affairs)

• PA Chairman Mahmoud Abbas and Hamas leader Khaled Mashaal reached an agreement in Cairo on 22 December on national reconciliation and a strategic partnership. A new temporary leadership was formed for the PLO, for the first time in tandem with Hamas and Islamic Jihad. Hamas' joining of the PLO does not herald a strategic shift in the movement's policy or recognition of the agreements the PLO has signed with Israel. The Hamas leadership keeps emphasizing that it seeks to take over the PLO after new elections to the Palestinian National Council and to alter the PLO platform in accordance with its own views 
• Osama Hamdan, in charge of foreign relations for Hamas, asserted in an interview: "Whoever thinks Hamas has changed its positions and that it accepts the PLO's political platform of surrender is dreaming or fooling himself." Hamdan went on to state that "Hamas is seeking a national framework to reconstruct the PLO [and] reconsider its political platform...from the standpoint of our basic principles and rights, which do not accept bargaining, particularly [over] the liberation of our land from the river to the sea and the right of return."
• Hamas has reached an agreement with Abbas on adopting the "popular resistance" paradigm for the struggle against Israel. Various political elements view this position of Hamas as a sign of pragmatism, heralding a process of accepting Israel's existence including willingness to negotiate with it on a political settlement. Yet the openly stated positions of the Hamas leadership do not support this assessment. 
• An official Hamas announcement on 27 December stated: "We underline our adherence to our right to the struggle in all its forms, particularly the armed struggle, for the removal of the occupation. The way of resistance [muqawama in the original, with a double entendre of resistance and struggle], jihad, and martyrdom for Allah [istishhad] has proved that it is the only way to forcefully attain our rights and the liberation of our land, Al-Quds [Jerusalem], and our holy places.
• Hamas' growing confidence stems first and foremost from the consequences of the Arab Spring, or more precisely the Islamic Spring, which has empowered the Muslim Brotherhood in Egypt and other countries. For years under Mubarak's regime, Egypt gave backing to the PA. Now, in the wake of the revolution, Egypt stands to become a huge source of strength for Hamas, especially once the Muslim Brotherhood forms the next government there.
  
  Lt. Col. (ret.) Jonathan D. Halevi, a senior researcher at the Jerusalem Center for Public Affairs, is a former advisor to the Policy Planning Division of the Israel Ministry of Foreign Affairs.