Friday's world stories

"A moment of Palestinian soul-searching"
President Trump's decision to officially recognize Jerusalem as the capital of Israel has sparked demonstrations in The West Bank, where NBC News' Chief Foreign Correspondent Richard Engel reports Palestinians are saying the peace process is "dead."
"Some Palestinians say this is the start of a new intifada (uprising). I’d say most of the analysts I’ve spoken to -- argue that the Palestinians don’t have the leadership right now to organize or sustain it ... This is a moment of Palestinian soul-searching. Some say they need to go to the streets in a violent uprising, others have told me Palestinians need to push for a “one state solution,” pushing for Palestinians to become Israeli citizens with the hope that, over time, democracy and demographics will be in their favor."— Engel in an interview with Axios
Disclosure: NBC is an investor in Axios

Inside China's "Happy Town": sex toys and adult-only hotels
The South China Morning Post is running a series on three of the biggest risks to China's economy. The latest installment examines the urban-rural development gap.
In a push to bridge the gap, the local government of one sleepy riverside town — Yucheng, about an hour's drive from Shanghai — signed a 10 billion yuan (U.S. $1.5 billion) deal with a Chinese company to develop a "Happy Town." It will include a sex toy shopping street, a sex exhibition centre, and an "adult-only" hotel.
Get smart: Local officials are under huge pressure from Beijing and are desperate for ideas to revitalize their jurisdictions. Many will fail but perhaps Yucheng will end up vibrating its way out of poverty.

U.K. and E.U. reach "phase one" Brexit deal
The United Kingdom and the European Union announced a last-minute "breakthrough" deal on the first phase of Brexit negotiations this morning, per the BBC. The deal ensures there will be no hard border between Northern Ireland and Ireland — which had derailed the talks earlier this week — guarantees the rights of E.U. citizens in the U.K. (and vice versa), and agrees on the financial terms for the U.K.'s exit from the E.U.
Why it matters: It allows both parties to move onto the critical "phase two" of Brexit discussions and gives Prime Minister Theresa May political cover for her leadership back home. But "phase two" centers around trade negotiations, which is likely to be an even more contentious issue in the months to come.
North Korea says war is a matter of when, not if
The U.S. flew a B-1B supersonic bomber over South Korea as part of a massive combined aerial exercise involving hundreds of warplanes — a clear warning after North Korea last week tested its biggest and most powerful missile yet.
"N. Korea says war is inevitable as allies continue war games," AP reports from Seoul: "In comments attributed to an unnamed Foreign Ministry spokesman ... North Korea says a nuclear war on the Korean Peninsula has become a matter of when, not if."




