President Mahmoud Abbas attended the meetings before the Arab League Summit in Libya on October 8, held to discuss the future of direct Palestinian-Israeli talks. In comments made before the summit officially opened, Abbas brought into question both the "need" for the Palestinian Authority's continued existence if the talks did not produce a Palestinian state and his own position as president. Earlier in the week, Abbas had told US envoy George Mitchell during one of their frequent meetings that if Israel continues to build settlements he would resign as President.

Abbas held his ground over Israel's continued settlement construction, saying he would not return to direct talks if the status quo remained unchanged. The Arab ministers, who said they endorsed Abbas' decision, said they would give the United States one month to resolve the settlement crisis in a final bid to salvage the peace talks.

Abbas made it clear that there were more ways than one to realize a Palestinian state, saying the Palestinians could call on the Americans to recognize their state on the 1967 borders, for the United Nations to carry out that duty or for the entire Palestinian territories to be put under international auspices.

Nabil Abu Rdeineh confirmed the Arab stances and that of President Abbas on October 8 saying the Arab Follow-Up Committee would convene in the coming weeks to study the alternatives presented by the president.

The Arabs seemed equally peeved by Israel's intransigence. "There are no talks at the moment because the position of the Israelis is very, very negative. They are not cooperating," Arab League Secretary-General Amr Moussa said on October 8. The Americans are trying, on their part to hold onto the talks as much as possible, reportedly offering "security guarantees" to Israel if they agreed to extend the settlement freeze. Israel has not taken the bait so far, refusing to extend any freeze, saying it is "too early" to talk about a renewed extension. Following the Arab summit, the US expressed appreciation for the Arabs' support of their "efforts" to keep the direct talks afloat. "We appreciate the Arab League's statement of support for our efforts to create conditions that will allow direct talks to move forward. We will continue to work with the parties, and all our international partners, to advance negotiations toward a two-state solution and encourage the parties to take constructive actions toward that end," said US spokesperson Philip Crowley.

The one-month grace period offered by the Arabs to the US has not shown any promise in terms of Israeli settlement actions on the ground, which are moving full speed ahead. On October 6, head of the Yesha Council of Settlements proudly announced that "construction in Judea and Samaria [West Bank] is resuming normalcy. After ten wasted months, that only caused harm and didn't benefit anybody, we are returning to routine."

He is right. In the settlement of Kedumim, 56 new houses are under construction while in Ariel 54 houses are slated to be built for settlers evacuated from the Gaza settlement of Netzarim. In Karmei Tzur in the Gush Etzion bloc workers have started building 56 houses and in Adam, land-leveling work has begun for 24 new houses. In the southern West Bank, 34 houses are being built in Kiryat Arba while in the settlement of Nariya and Matityahu, 20 new houses each are being built.

Settlers have not only been emboldened by their government's decision to continue building, but also to wage even more attacks on neighboring Palestinians. On October 9, Jewish settlers attacked Palestinians while they picked olives in Burin, south of Nablus. Settlers from the illegal settlement of Bracha threw stones at the farmers, damaging several olive trees.

However, perhaps the most traumatic incident with Jewish settlers this week took place on October 8 when a settler leader by the name of David Be'eri ran over two young Palestinian boys in Silwan who were throwing stones. The boys, aged 10 and 11, sustained injuries to the head, shoulders and chest and were taken to Maqassed Hospital for treatment. The incident was captured on film and posted on the internet which showed one boy – shirtless – flipping over the hood of the car as the settler ran directly into him.

Then on October 4, settlers took a torch to the Prophet's Mosque in Beit Fajjar, burning its contents which included several copies of the Quran and wrote racist slogans on the walls. President Abbas strongly condemned the attack, saying it was a severe violation of the right to religious freedom and a violation of the Geneva Convention and international law.

A day later, six rabbis from various West Bank settlements came to the village bringing fresh copies of the Quran as a sort of "peace offering" for what many are calling part of settlers' "price tag policy" against the settlement freeze. The half-baked offer was overlooked by most Palestinians who do not recognize Jewish settlers' right in the West Bank in the first place. Washington also said it strongly condemned the mosque burning, with Crowley calling for the perpetrators to be brought to justice.

The Israeli army has done its part as well in cracking down on Palestinians this week. On October 8, Israeli forces raided Hebron, killing two Hamas operatives Nashat Karmi and Mamoun Natsheh in the early morning hours. Israel claims the men were involved in the shooting of four settlers on August 31 and have been wanted ever since. Hamas has vowed to avenge the killings. Izzedin Al Qassam Brigades spokesman Abu Ubaidah said his group would "reply in a suitable way to such a crime."

The Palestinian government in Ramallah also strongly denounced the assassinations, with Prime Minister Salam Fayyad saying they "weakened the PA" and "undermined its accomplishments in imposing stability, public order and the rule of law."

On October 3, Israeli army forces also shot and killed Sair resident Ezzedin Qawasbeh, 38 at a Jerusalem checkpoint. Qawazbeh, who is married with six children, was shot at a checkpoint near Essawiyeh while trying to cross into Israel for work.

The Israeli army found itself in hot water again for inappropriate videos of its wayward soldiers. On October 6, a video showing an Israeli soldier belly dancing beside a bound and blindfolded Palestinian woman hit the internet. The woman, 35 year old Ihsan Dababisa from the village of Nuba in the Hebron area, says she is planning to sue the soldier who taped her. “I saw the tape and I couldn’t sleep all night. I was deeply humiliated. The sound of the soldiers laughing and the music was roaring in my ears," the woman, who was arrested on October 11, 2007, said.

Meanwhile, in Israeli affairs, Prime Minister Benjamin Netanyahu made a snap decision on October 7 to back the controversial citizenship law, which requires anyone with Israeli citizenship to swear allegiance to Israel as a "Jewish and democratic state." The law has angered many, especially Israel's 1.2 million Palestinian citizens of the state.

Finally, in his continued effort to build the Palestinian state from within, Prime Minister Fayyad announced on October 6 that the government was working on a law that would make civil service mandatory for Palestinian youths. The civil service, equivalent to army drafting, would help instill a sense of obligation towards building the state, says Fayyad.