An operation involving US forces has left at least seven civilians dead in Iraq. On Wednesday, US and Iraqi troops stormed three homes in the town of Fallujah. According to McClatchy Newspapers, the joint team set off explosives and shot dead members of two families. A young boy said the soldiers shot and killed his father and three of his brothers, one of them in the fifth grade. Four people were also wounded, including a ninety-year-old woman. The sister of one of the slain victims spoke out after the attack.

Sister: “Where is the government? How can they say that US combat forces have withdrawn? They’ve raided families at the dead of the night, shooting and frightening them. Where is the army, and where is the police?”

The raid was the deadliest involving US forces since President Obama declared the nominal end to combat operations earlier this month.

Talks between Israel and the Palestinian Authority appear to have reached a deadlock despite US claims of progress. According to media reports, Israeli Prime Minister Benjamin Netanyahu told Palestinian Authority President Mahmoud Abbas in Jerusalem Wednesday that West Bank settlement construction will continue when a partial freeze expires at the end of the month. Abbas is said to have repeated his vow to walk away from the talks if the settlement construction resumes. US Middle East envoy George Mitchell would say only the two sides addressed “tough issues.”

George Mitchell: “In this evening’s meeting, President Abbas and Prime Minister Netanyahu resumed yesterday’s discussion of core issues and key challenges to this process. While today, as in the past, what I’m able to share with you is limited, I will say that the two leaders are not leaving the tough issues to the end of their discussions; they are tackling upfront and did so this evening.”

A new analysis shows the Republican-led plan to extend the Bush administration’s tax cuts for the wealthiest Americans would add nearly $4 trillion to the federal debt. Republicans introduced the plan this week to counter President Obama’s proposal to extend the tax cuts only for households making under $250,000. The Washington Post says Obama’s plan would add $1.4 trillion to the debt, a difference of around $2.5 trillion compared to the Republican plan. Speaking from the White House, President Obama said Republicans are holding middle-class tax cuts hostage.

President Obama: “Right now, we could decide to extend tax relief for the middle class. Right now, we could decide that every American household would receive a tax cut on the first $250,000 of their income. But once again, the leaders across the aisle are saying no. They want to hold these middle-class tax cuts hostage until they get an additional tax cut for the wealthiest two percent of Americans. We simply can’t afford that.”

President Obama meanwhile is reportedly preparing to name Harvard Law School professor Elizabeth Warren to a special advisory position to oversee the newly created Consumer Financial Protection Bureau. By appointing Warren in that fashion, Obama would avoid the risk of a drawn-out confirmation process fueled by Republican opposition.

New figures show a record number of US homes were foreclosed on last month. According to RealtyTrac, banks seized over 95,000 homes in August, an increase of 25 percent compared to the same period last year.

Pennsylvania Governor Ed Rendell has apologized following the disclosure his administration paid a private firm to monitor a number of local activist groups. The Philadelphia-based Institute of Terrorism and Research Response received $125,000 to gather material for state anti-terrorism bulletins. The bulletins included information on an anti-BP candlelight vigil, a gay and lesbian festival, and even a rally to support Rendell’s own campaign to increase spending on public education. The company also monitored opponents of drilling in the Marcellus Shale, noting their plans to attend public hearings and screen the documentary Gasland. In addition to law enforcement agencies, the “intelligence” was also passed on to private entities, including gas companies. At a news conference, Rendell apologized to the targeted groups.

Gov. Ed Rendell: “I apologize to the Marcellus Shale protesters. I apologize to the taxpayers protesters. I apologize to the Lesbian and Gay Pride Festival. I apologize to virtually every single name that was on this list.”

Rendell says he just learned of the monitoring in the past week but has refused to fire the director of Pennsylvania’s Office of Homeland Security. The company that carried out the spying, Institute of Terrorism and Research Response, has extensive ties with the Israeli government. On its website, the company bills itself as “the preeminent Israeli/American security firm.” The website also touts the company’s “Israeli-style training” and says all its courses “are approved by the Israeli Ministry of Defense.”

The news that the spying’s targets included anti-drilling activists comes as a group of Pennsylvania families has filed a lawsuit alleging that hydraulic fracturing has contaminated their water wells in the Marcellus Shale. The suit alleges Houston-based Southwestern Energy exposed residents in northeastern Pennsylvania to dangerous chemicals through the leaking of fracking fluid into the aquifer.

The Obama administration has ordered oil companies to seal 3,500 idle wells and shutter 650 platforms in the Gulf of Mexico to prevent future leaks. An Associated Press investigation earlier this year found more than 27,000 abandoned Gulf sites are in danger of leaking, with about 13 percent said to be particularly worrisome. The Coast Guard says the ruptured BP oil well, meanwhile, will be permanently sealed by Sunday.

A newly discovered fish kill is raising concerns the BP oil spill continues to devastate the Gulf’s marine life. On Friday, hundreds of thousands of dead fish were discovered floating in Louisiana’s Plaquemines Parish. The parish’s president, Billy Nungesser, said government testing should be done to determine if the spill was a cause.

Billy Nungesser: “This is an extremely large fish kill, and there’s many species in there. It’s not just one group of fish; it’s redfish and trout and flounder. All species have been identified in this fish kill. We’re talking about the long-term testing of the quality of the water, the fish, and the environment. And we don’t see a collective group really wanting to know what’s going on. And we need to demand that happens.”

The news comes as BP CEO Tony Hayward faced questioning on the spill Wednesday before a British parliamentary panel. Hayward defended BP’s safety record in the Gulf.

Tony Hayward: “We had an obligation to clean up the oil, which we have to a large extent done. And we had an obligation to remediate any environmental damage, which we will do. And we had an obligation to compensate those who have been effected. But the report was not designed to apportion blame. The report was designed to identify what exactly happened, allow us to learn from it and ensure that those learnings could be rapidly applied across the rest of BP’s drilling operations and, I would assert, many other drilling operations around the world.”

The mothers of the two remaining American hikers still jailed in Iran have spoken out for the first time since the release of Sarah Shourd. Shane Bauer and Joshua Fattal remain behind bars over fourteen months after they were jailed along with Shourd while hiking near the Iran-Iraq border. Shourd was freed Tuesday on $500,000 bail. Josh Fattal’s mother, Laura Fattal, called for the pair’s release.

Laura Fattal: “Part of the back and forth before Sarah was released was there was an investigation of all three of them, and Iran knows they had three innocent hikers. And now they have two innocent hikers. And so, we’re eager for the judicial system and all the systems within Iran to finish and let these — let my son and his very good friend Shane be released and come home to their families.”

And the nation’s corn refiners are seeking to rebrand the ingredient “high-fructose corn syrup.” In a filing to the Food and Drug Administration, the Corn Refiners Association has asked permission to change the syrup’s name to “corn sugar.” High-fructose corn syrup has been cited as a key factor in the US obesity epidemic.