Palestinian Muslims began their last week of Ramadan with 250,000 worshippers thronging to Jerusalem's Al Aqsa Mosque on September 11 to perform noon prayers. While Israeli police and border guards were out in full force at checkpoints and around the Old City, the day did not go without incident. In the east Jerusalem quarter of Silwan, just outside the city walls, an Israeli man shot and wounded two Palestinians, one who is said to be in critical condition.

According to the Israeli, he said he felt "threatened" by the Palestinians, one of whom is a 13-year old boy. After the two were taken to hospital, Palestinian youths in Silwan proceeded to pelt Israeli police with stones.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu remained defiant in the face of the US's call to freeze settlements. On September 10, Netanyahu's Likud Party hosted its annual Rosh Hashana (Jewish New Years) toast during which the premier addressed the guests.

"I call upon our settler brethren: You are good, loyal citizens of Israel. You deserve a normal life and we will pursue a peace process which will enable you to have it," he said. Netanyahu also tried to put other controversial issues at ease for his people. "I've been working on getting international recognition for two things: Israel as the Jewish homeland and that any peace agreement must include security arrangements. We will not allow for a 'Hamastan' among us." Netanyahu then hammered the last nail in the coffin of any real peace. "Jerusalem will remain united," he concluded, "And Israel's capital forever."

Such pledges have been put into action throughout the week. On September 9, tenders were announced for the construction of 486 settlement units in the Pisgat Zeev settlement in east Jerusalem.

On September 7, Israeli Defense Minister Ehud Barak ratified the construction of 455 settlement units in six West Bank and east Jerusalem settlements.

On September 6, construction began for the establishment of 20 new homes in the Jordan Valley settlement of Maskiot. In 2006, following the evacuation of the Gaza settlements, 30 settler families were relocated here.

Where Israel is not building settlements it is tearing down Palestinian homes to make way for them. On September 9 the Israeli Higher Court ordered a timetable for the demolition of dozens of homes in Yitma and Sawieh in the Nablus area. Tens of homes have already been served demolition orders in these two villages under the pretext of construction without licensing.

Furthermore, the Waqf-run Aqsa Institute revealed a new tunnel running beneath Silwan. The tunnel, which is said to be over 120 meters long, moves northwards towards Al Aqsa Mosque, which the Waqf says Israel wants as a link with the other underground tunnels running beneath the mosque. According to Silwan residents, the diggings are causing cracks and other problems in the foundations of some of the houses.

Meanwhile, Palestinian President Mahmoud Abbas is sticking to his guns on not returning to negotiations with Israel until settlements are halted. On September 7, Abbas called on the Unites States to take a decisive stance towards Israel on its settlement expansion. The president, who was on a visit to Saudi Arabia, also urged his Arab brethren not to kowtow to Israeli and US demands vis-à-vis offering normalization steps to Israel until the latter completely halts settlement construction.

In the meantime, Egypt has presented Palestinian factions with a document it hopes will bring the Palestinians to an agreement for national unification. The document, which was officially presented to the factions on September 9, details a number of points and directives to the Palestinians. The PLO Executive Committee said a day later that it welcomed the Egyptian effort and would "deal positively with it."

"We greatly appreciate the ongoing efforts of the Egyptian leadership and will continue to cooperate with Egypt in the coming phase to make this initiative a success," announced Yasser Abed Rabbo, PLO executive committee member.

Among other things, the paper included the following points: the conducting of presidential, legislative and PNC elections in the second half of 2010; the formation of a higher security committee; a committee for detainees, which will set a list of detainees for release once an agreement between the parties is signed; and a joint committee to supervise government affairs in the West Bank and Gaza "in a manner that does not lead to further reinforcement of the internal split."

The parties have yet to announce whether they agree on all the points put forth by Egypt. Fateh has already expressed reservations over elections being held in the latter half of 2010, maintaining that constitutionally, they are to be held in January.

In Gaza, on September 5, Sameh al-Bitar, 20, from Gaza City was killed in fighting with Israeli soldiers. On the same day, Maher Al Za'anein, 13 from Bet Hanoun also died from injuries he sustained last Friday in Israeli shelling on his town near the Erez Crossing.

Sweden is still feeling the backlash from Swedish journalist Donald Bostrum's article last month about Israel's harvesting of Palestinian organs. This week, the country's foreign minister Carl Bildt announced that he had cancelled his visit to Israel, scheduled for September 11. Bildt's official reason was what he called "bad timing" because of the ongoing talks between Israel and the US on the peace process. However, a Swedish foreign ministry source confirmed that the real reason was the minister's concern that he would be received coldly by Israeli officials.

Finally, in an op-ed in the Washington Post on September 5, former US President Jimmy Carter said if Israel continued with his ongoing settlement expansion, it would be looking at a one-state solution. "A more likely alternative to the present debacle is one state, which is obviously the goal of Israeli leaders who insist on colonizing the West Bank," he wrote. "A majority of the Palestinian leaders with whom we met are seriously considering acceptance of one state, between the Jordan River and the Mediterranean Sea."

Carter maintained that a two-state solution was the most ideal but would not be possible in the face of constant settlement expansion. The result, he said would be a bi-national state. "By renouncing the dream of an independent Palestine, they [the Palestinians] would become fellow citizens with their Jewish neighbors and then demand equal rights within a democracy," Carter wrote.