• Palestinians, Israelis Play Down Chances of Imminent Talks - Ali Sawafta and Allyn Fisher-Ilan
  Israelis and Palestinians played down on Monday the prospects of their envoys meeting in Washington any time soon, and the White House said getting the two sides to agree to a peace deal remained an "enormous challenge." Palestinians said negotiations could not begin unless it was clear in advance that they would be about a future state based on the pre-1967 lines. "If they reach an agreement over the details, in accordance with the Palestinian demands, then the launch of negotiations will be announced," Nabil Abu Rudaineh, spokesman for Palestinian President Mahmoud Abbas, said Monday. (Reuters)
• Palestinians in Gaza Feel the Egypt Effect as Smuggling Tunnels Close - Harriet Sherwood and Hazem Balousha
  The usually clogged streets of Gaza City are noticeably quieter. Construction sites are deserted. Since Egyptian President Mohamed Morsi was ousted by the military on July 3, the Egyptian army has clamped down on the smuggling trade through the tunnels as part of a drive to regain control of Sinai. Egypt is thought to have closed or destroyed around 80% of the tunnels, which provide Hamas with an income from taxes estimated at 40% of the government's revenue. (Guardian-UK)
      See also below Observations: Strangling Hamas - Jonathan Schanzer (Foreign Policy)

• Netanyahu: No Distinction between Hizbullah Military and Political Wings
  In response to the EU decision Monday to include the military wing of Hizbullah on its list of terrorist organizations, Prime Minister Netanyahu said: "I welcome the fact that the EU has also declared Hizbullah to be a terrorist organization and I thank the leaders of its member states. In recent years, the State of Israel has invested great effort in explaining to all EU member states that Hizbullah is the terrorist arm of the Iranian regime and perpetrates attacks around the world....Hizbullah is one organization, the arms of which are indistinguishable."  (Prime Minister's Office)
• Netanyahu: "Europe Wants to Erect New Berlin Wall in the Middle of Jerusalem" - Shlomo Cesana
  Referring to the EU's decision to impose a funding ban on Israeli institutions operating beyond the pre-1967 lines, Prime Minister Benjamin Netanyahu told the German magazine Die Welt, in an interview published Sunday, that the EU was "trying to impose permanent borders by applying financial pressure on Israel rather than pursuing negotiations. That is an unfair move at any time, not just now, when U.S. Secretary of State John Kerry is trying to get the parties back to the negotiating table."
      He said Brussels "wants to erect a new Berlin Wall in the middle of Jerusalem, but anyone who has ever visited Jerusalem knows that you cannot turn back time and divide neighborhoods that would clearly remain under Israeli control as part of any peace agreement."  (Israel Hayom)
      See also Germany Backs Away from EU Settlement Directives - Benjamin Weinthal
  Germany distances itself from the "controversial European Union guidelines" banning cooperation with Israeli entities beyond the Green Line, a foreign policy spokesman in the Bundestag announced on Friday. MP Philipp Missfedler, the Bundestag spokesman for German chancellor Angela Merkel's Christian Democratic Union party, said, "Israel is the recognized administrative power in the territories without which approved development projects like solar energy or sewage works could not be installed."  (Jerusalem Post)
• Birth Rates of Arabs and Jews in Israel Are Converging - Paul Morland
  The birth rates of Arabs and Jews in Israel are close to converging. In the first 12 years of this century the number of Arab births in Israel has flat-lined at 40,000 per annum. Over the same period, Jewish births have risen from 95,000 to 130,000. In the first four months of 2013, Jewish births were up 38% compared to the same period in 2001; Arab births were down 6%.
      The falling Arab fertility rate reflects well-documented trends elsewhere. Between the early 1960s and 2005-2010, the UN reports that the average woman in Egypt went from having 6.5 children to fewer than 3. In Lebanon, the fall was from 5.5 to 1.5. In Jordan and Syria, fertility rates declined from 8 and 7.5 to 3 and 3.5.
      The surprising factor has been the steady rise of fertility of Israel's Jewish women to around 3, a rate unprecedented for a developed country. (Jerusalem Post)

• "Occupied Territories": What about Cyprus, Kashmir, Tibet? - Douglas Murray
  Last week the EU issued a ban on funding of, or cooperation with, any Israeli institutions that operate in what it calls the "occupied territories." There are many countries in the world with border disputes, including Cyprus, China [Tibet], and Pakistan [Kashmir]. Yet the EU has full diplomatic and trade relations with all these countries.
      The northern part of Cyprus has been illegally annexed for the last four decades by Turkey, even though Turkey does not have - as Israel has with the West Bank - any legitimate historical, political or other territorial claims on the island. Yet in 2013, many leading EU officials actually want to promote Turkey into a full member-state of the EU.
      With nearly 100,000 dead in Syria and Egypt going through a counter-revolution, the issue of where Jews should or should not live inside their historical homeland is a matter of the lowest international import. The writer is associate director of the Henry Jackson Society in the UK. (Gatestone Institute)
• Misreading the Middle East - Amir Taheri
  Kerry should have read the notes left by another Democratic ex-senator, George Mitchell, who was dispatched by President Obama early in his first term with the mission to create a Palestinian state within a year. Mitchell quickly found that a peace settlement was not a priority for either protagonist. He also knew that, in his final months in office, President Bill Clinton had brokered the best deal imaginable within reason but failed to persuade Yasser Arafat to accept it.
      The Mitchell mission failed because there was no active and urgent demand for peace. Today, a status quo has been established and both sides are comfortable with it. This doesn't mean that Palestinians and Israelis don't want peace. They do, albeit with different definitions of "peace." However, weighing the risks of a "golden" unknown against the certainties of the status quo, most Palestinians and Israelis tend to prefer the latter. (New York Post)
• What's Behind Rebel-Qaeda Tensions in Syria? - Michael Weiss
  Last week was a busy one for internecine warfare among Syrian rebel groups. Yet according to Charles Lister, an analyst with IHS Jane's Terrorism and Insurgency Center in London, "all claims of fighting have come from anti-Islamist sources and have since largely been denied or proven inaccurate by influential and well-placed sources on the ground....Fundamentally, this recent flare-up in rhetoric appears to have been a media campaign pushed by the moderate political opposition outside Syria."
      So desperate are these forces to receive long-promised arms from the U.S. that they are now trying to exploit real or imagined tensions on the ground to help expedite Washington's rebel aid program. Unfortunately, this strategy is backfiring. In recent months, the jihadists of Jabhat al-Nusra have gained at the expense of the moderates. In May, moderate rebel commanders throughout Syria told the Guardian that the Western-backed opposition had lost "a quarter or more of their strength" to the al-Qaeda affiliate. Some 3,000 rebels had gone over to al-Nusra because of the FSA's lack of weapons and ammunition. (NOW-Lebanon)

Strangling Hamas - Jonathan Schanzer (Foreign Policy)

• The downfall of the Muslim Brotherhood government in Egypt has been widely described as a blow to Hamas and its pocketbook. The Egyptian Army's ongoing operations against the subterranean tunnels connecting Egypt to Gaza are wreaking havoc on Hamas' finances. Funding from Tehran has dropped off precipitously since the civil war in Syria prompted Hamas to loosen its ties to the "Axis of Resistance."
• Since Morsi's ouster, the military has arrested at least 29 Brotherhood financiers, including at least one significant contributor to Hamas' coffers, according to a senior Israeli security official. It has also reportedly deployed 30,000 troops to Sinai.
• Washington should attempt to use whatever leverage it has to convince both Turkey and Qatar to cut back on their funding of Hamas. Congress could pull strings to speed up delivery of or withhold the advanced weapons systems that both countries are eagerly awaiting, depending upon how the conversation goes.
• The Egyptian army's tunnel operations are slowly strangling Hamas. If one or more of the Islamist movement's other funders cut back their aid even a little, its financial crisis will only deepen. A Muslim Brotherhood government just fell unexpectedly in Cairo - it could happen again in Gaza.
• For John Kerry and his tenuous peace initiative, this is a window of opportunity that should not be ignored.
  
  The writer, a former terrorism finance analyst at the U.S. Treasury, is vice president for research at the Foundation for Defense of Democracies.