On the heels of the State Department releasing the 2006 Human Rights Report, the Chinese government issued its annual rebuttal. As expected - the Chinese find many faults with the US governments protection of human rights.

While speaking in Shanghai, Treasury Secretary Paulson focused on China’s need for further capital market reforms. Unlike prior efforts, Secretary Paulson chose not to focus on the undervalued yuan and the US trade deficit with China (at least minimally due to the undervalued currency).

On the issue of reform, Chinese officials are considering tax and property law changes which would reportedly provide for private property rights and balance domestic and foreign corporate tax rates over time.

Providing a somewhat detailed view of how West Bank and Gaza are drifting apart, IDF General Yoav Galant discussed how the Hamas has subdivided Gaza into four military commands of the South, Central, Gaza City and Northern brigades, as Hamas increases its control by evolving into a hierachically structured force in the mold of Hizballah. Palestinian terrorists are now traveling to Syria, Lebanon and Iran to recieve training, training that was called “a strategic danger more than all the weapons smuggled into Gaza.”

Meanwhile, as Fatah’s PA President Mahmoud Abbas looks to extend the informal Gaza-Israel cease-fire to the West Bank to end Israeli operations there, the EU’s Javier Solana said that Hamas must first must give clear a recognition of Israel before the European Union will re-start the flow of aid money to the Palestinian government, unity or none.

In other news, Israeli Arab leader Sheik Raed Salah, called Israel’s ‘ticking time bomb’, has been barred from the construction and excavation site near the Temple Mount / Noble Sanctuary. The Israeli Arab has made calls for an Arab uprising against Israel.