• Islamic State Expands in Europe, Mideast, North Africa, Asia - Bill Gertz
  The Islamic State is expanding to seven emerging areas of Europe, the Middle East, North Africa and Asia, according to a State Department security report by the Overseas Security Advisory Council. The seven new theaters of operation are Turkey, Tunisia, Lebanon, France, Belgium, Bangladesh and the Philippines. While the Islamic State is active in other locations as well, these seven locations "represent areas where there is expected to be a continued interest in operating, support networks to do so, and a likelihood for more than a one-off attack," the report states. (Washington Times)
• Israeli Ambassador to Cairo Upbeat on Egypt Ties - Brian Rohan
  Blast walls, sandbags, and guards ring the Israeli diplomatic compound in the Cairo suburb of Maadi. But inside the Embassy, Ambassador Haim Koren is upbeat when assessing the future. "This is one of the best times we've ever had" in terms of cooperation between governments, said Koren, a veteran diplomat and fluent Arabic speaker. "There's good cooperation between the armies, we have understandings about the Sinai Peninsula, and basically, we see (eye-to-eye) on development of the region."
      After decades of wars followed by years of an uneasy peace, Israel has emerged as a discreet ally to Egypt's President el-Sissi, who often speaks by phone with Israeli Prime Minister Netanyahu and has helped Israel further isolate the Hamas militants ruling Gaza. "Radical Islamic terrorism emerged from the same root no matter if it happens to be Hamas or the Muslim Brotherhood, ISIS, Jabhat al-Nusra or al-Qaeda," Koren said. El-Sissi "understood quickly that we are all in the same boat."  (AP-Washington Post)

• Israel Rejects U.S. Criticism of Housing Construction in Jerusalem
  Prime Minister Benjamin Netanyahu responded Wednesday to American criticism of construction in Jerusalem, saying, "We are familiar with the American position. It is not new. It is also not acceptable to us. With all due respect, it is neither the construction in Jerusalem nor that in Ma'ale Adumim that make peace more remote. What prevents peace, first of all, is the constant incitement against the existence of the State of Israel within any borders, and the time has come for all the nations of the world to recognize this simple truth. There is also a second truth: The way to resolve conflicts is by direct negotiations."
      "We are ready at all times to hold direct negotiations without preconditions with our neighbors; however, they are not prepared to hold them with us. These are the two things that are preventing peace, not a few apartments near the city of Ma'ale Adumim, or several neighborhoods in Jerusalem."  (Prime Minister's Office)
• Congressmen Seek to End Palestinian Authority Stipends for Terrorists - Michael Wilner
  Members of the U.S. House Foreign Affairs Committee agreed on Wednesday to seek an end to a Palestinian program granting monthly stipends to convicted murderers and terrorists. At a hearing on the matter, Democratic and Republican members vowed to close a loophole in U.S. foreign aid to the Palestinian Authority which allows such payments.
      The chairman of the committee, Rep. Ed Royce (R-Calif.), characterized the program as a "pay to slay" system. Ranking member Eliot Engel (D-N.Y.) said, "It is absolutely outrageous to pay cold-blooded killers and call them martyrs," and that the program "won't be tolerated" by Congress going forward. (Jerusalem Post)
      See also below Observations: Palestinian Authority Using U.S. Aid Money to Pay Hamas Members Who Killed U.S. Citizens - Yigal Carmon (MEMRI)
• Three IDF Soldiers Hurt in Palestinian Car-Ramming Attack in West Bank - Tovah Lazaroff
  Three IDF soldiers were wounded on Wednesday in the West Bank when a car driven by a Palestinian terrorist rammed their vehicle, causing it to overturn. (Jerusalem Post)

• Sending Iran the Right Deterrent Signals - Dennis Ross
  Should Americans have confidence that everything is being done to signal Iran about the consequences of potential violations of the deal with the West? Unfortunately, the answer appears to be no - Tehran has already committed several unmistakable violations of UN Security Council Resolution 1929, such as conducting ballistic missile tests, transferring conventional arms, and flouting international travel bans. Yet Iran has not faced any meaningful consequences for continuing behaviors that are clearly provocative.
      The next U.S. administration should toughen American declaratory policy so that Iran understands the consequences of violating its commitment not to seek, acquire, or develop nuclear weapons. Indeed, it is essential that both Tehran and the international community become accustomed to the reality that pursuing a weapon in violation of the JCPOA will trigger force, not sanctions.
      The U.S. should also increase the cost of Iran's threatening and destabilizing behavior in the region, which has hardly changed since the deal was signed. This means addressing Tehran's actions vis-a-vis Syria, Iraq, Yemen, and Palestinian terrorist groups. Washington must make the adventurist policies of the Revolutionary Guards too costly for Iran. The writer is a former senior Middle East advisor to President Obama (2009-2011). (Washington Institute for Near East Policy)
• Why Israel Builds Housing in Jerusalem - Editorial
  In the wake of recent Palestinian terror attacks, Israel approved the building of 560 housing units in Ma'ale Adumim, just east of Jerusalem, and 240 units in the Jerusalem neighborhoods of Ramot, Gilo and Har Homa. We build in existing Jewish neighborhoods in Jerusalem, such as Pisgat Ze'ev and Gilo, or in consensus settlement blocs like Gush Etzion and Ariel, not out of a desire to punish Palestinians, but rather out of a real need to supply housing for a fast-growing population. Unlike the vast majority of Western countries, Israel enjoys brisk natural population growth.
      Building housing is not a tactic for blocking the creation of a Palestinian state. It is an expression of Israel's unique connection to this land and a reflection of Israeli society's health and vitality. (Jerusalem Post)
• The Great Arab Implosion and Its Consequences - Ofir Haivry
  Another reality is emerging in the Middle East, redrawing the regional power balances - the rise of newly armed, self-governing nations and tribes. They include a de-facto Kurdistan possessing the largest undefeated armed force between Jerusalem and Tehran; an Alawite-dominated western Syria; a consolidated Shiite southern Iraq; an increasingly autonomous Druzistan in southern Syria; a Yemen redivided into de-facto northern Shiite and southern Sunni countries; Libya's historical provinces of Cyrenaica and Tripolitania recreating their old division; with the possibility of the Sunni tribes of western Syria and eastern Iraq coalescing into a desert Sunnistan with or without IS.
      Similar developments are clearly brewing in Saudi Arabia, Sudan, Lebanon, and Jordan, as well as among the Berbers of Algeria and the Kurds of Turkey and Iran. With artificial regimes and borders gone, people in the region seek protection and solidarity in the old identities that have survived the Arab reverie: their nation, their religion, their tribe. These are the only building blocks upon which a new and stable system can be founded. The writer is vice-president of the Herzl Institute in Jerusalem. (Mosaic)

Palestinian Authority Using U.S. Aid Money to Pay Hamas Members Who Killed U.S. Citizens - Yigal Carmon (MEMRI)

• Yigal Carmon, President of the Middle East Media Research Institute (MEMRI), told the U.S. House Committee on Foreign Affairs on July 6 that in the Oslo Accords, Yasser Arafat made a commitment, on behalf of the Palestinian people to stop all terrorist activity. Yet the PA gives financial and other support to those who have continued their terrorist activities.
• By providing this support, the PA is encouraging terrorism in violation of its Oslo commitment. Furthermore, by using money granted by donor countries, the PA has made them complicit in encouraging terrorism as well.
• The 2016 PA budget allocates $172,534,733 for families of martyrs. Such payments are given to families of people from all the various Palestinian organizations that continue to commit acts of terrorism, constituting the deliberate encouragement of terrorism.
• This means the Hamas members who perpetrated the August 9, 2001, attack on the Sbarro restaurant in Jerusalem that killed 15, including seven children, and the July 31, 2002, attack on the cafeteria of the Hebrew University of Jerusalem that killed nine, four of whom were U.S. citizens, receive these allowances.
• Thus, the PA is paying Hamas members who killed U.S. citizens and the funds for this come from donor countries, including the U.S.