The Financial Times reports that the pro-peace initiative pioneered by Israeli and Palestinian business leaders, Breaking the Impasse, has itself reached an impasse. Palestinian business figures involved in the organisation are quoted saying that views are polarised over Operation Protective Edge, effectively putting the movement on hold.

The Telegraph covers an Israeli Supreme Court decision which upheld the right of small Israeli communities to operate acceptance committees which can determine whether potential residents are suitable for the community. The convention had been challenged on the grounds that it could encourage discrimination.

Meanwhile, the Independent reports a decision by Israel’s Interior Ministry to recognise Aramean Christian citizens as part of a distinct nationality, apart from Arab citizens of Israel. Israeli officials are quoted saying that the decision gives members of the small community the choice to define themselves however they wish, while some Arab politicians have accused the Israeli authorities of trying to divide Israeli Arabs.

The Telegraph online notes comments made by US Secretary of State John Kerry, who said that Syria’s President Assad has violated his commitments over chemical weapons by using chlorine gas in civilian areas.

Meanwhile, the online editions of both the Guardian and Telegraph report that the US Senate yesterday approved a bill to arm and train Syrian rebels, as part of the American effort to tackle ISIS. However, the Guardian online says that Iranian President Rouhani has called the US-led coalition “ridiculous,” while according to the Telegraph online, Iran’s Foreign Minister Zarif said that ISIS cannot be defeated by air strikes.

The Financial Times includes a report that the European Court of Justice has rejected the legality of a European Union freeze on assets of the Iranian central bank, due to an over-reliance on confidential sources in the petition.

In Iran itself, the online editions of the Telegraph and Independent both report that six Iranians who made a video of themselves mimicking the Pharrell Williams song “Happy” have been sentenced to 91 lashes each and a suspended six month prison sentence. According to the Independent online, in a separate case, an Iranian blogger who allegedly insulted Mohammed on Facebook has been sentenced to death.

In the Israeli media, the headlines continue to focus on the surprise resignation of Interior Minister Gideon Saar on Wednesday evening. Saar said that he was taking a break from political life to spend more time with his family. However, Israel Hayom speculates that Saar was planning his comeback before resigning, reporting that he met with former Communications Minister Moshe Kahlon, a popular former-Likud figure who is thought to be planning a return at the head of a new party. Yediot Ahronot suggests that Saar’s resignation is another example of Prime Minister Benjamin Netanyahu’s inability to properly nurture talent within his party. An unnamed Likud MK is quoted saying “Netanyahu is driving away the good people and not letting the next generation grow.”

Meanwhile, Maariv reports that Netanyahu is expected next week to remove any barriers standing in the way of Finance Minister Yair Lapid’s flagship legislation to exempt many first time home-buyers from VAT. The report says that Netanyahu will look to smooth over relations with Lapid regarding the VAT bill and the 2015 state budget, especially given the context of political instability generated by Saar’s resignation.

Israel Radio news reports that France’s President Francois Hollande will present a new initiative to broker a peace agreement between Israel and the Palestinian Authority (PA), when he meets PA President Mahmoud Abbas in Paris today. Apparently Hollande will suggest that all points previously agreed will serve as a framework for final status talks.