Axios

Palestinians are in their third day of protests against President Trump's announcement that the U.S. would recognize Jerusalem as the capital of Israel, with violent clashes reported.

Why it matters: According to PBS, four people have been killed since protests started — two Hamas members killed in what Israel said was a retaliatory airstrike, and two Palestinians shot dead during clashes near the Gaza border. Hundreds have been injured.

Prime Minister Theresa May secured a last-minute deal with the European Union yesterday on phase one of Brexit negotiations. But while she managed to resolve issues that had seemed potentially insurmountable just days earlier — and get her own Conservative Party, Northern Irish hardliners, Ireland, and the E.U all to sign off — the next steps could be even dicier.

What's next: The negotiations now move onto phase two, centered around the future of the U.K.-E.U. trade relationship. That issue makes up the very core of Brexit, and it's set to tear open fault lines between British politicians — even within May's own Cabinet — who have competing views of how far Brexit should ultimately go.

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

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.

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.