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Israel and Palestine is not necessarily overdone, but you had better come up with something new or at least at the frontier of thought for that region. If you do a lesser known topic, then it is easier to come up with an essay that will make you look good. Both are good topics, and going in-depth on Israel or Palestine will certainly help you. The choice ultimately is yours, and there isn't a direct advantage of choosing well-known versus esoteric.
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