ramallah, west bank  |  The Palestinians found themselves on the defensive last weekend after Washington announced it is renewing its efforts to relaunch Mideast peace talks.

Aides to Palestinian President Mahmoud Abbas said there is no point in negotiating while Israel expands settlements on land the Palestinians want for their state. However, Abbas may find it difficult to justify turning down an offer of intense, top-level U.S. engagement in the talks and a two-year cap for a deal on Palestinian statehood.

Israeli Prime Minister Benjamin Netanyahu was quick to affix blame, with his office saying the Palestinians have been holding up peace efforts, while “Israel took significant steps to advance the process.”

Benjamin Netanyahu

The statement came in response to comments made last week by U.S. Mideast envoy George Mitchell, who suggested in an interview with PBS’ Charlie Rose that the U.S. might use financial pressure, such as withholding loan guarantees, if Israel doesn’t make sufficient concessions in negotiations.

Mitchell is set to return to Israel and the West Bank this month. He told PBS he hopes to persuade Israelis and Palestinians during this trip that it is in their best interest to resume negotiations that broke down in December 2008.

In an indication the high priority President Barack Obama is putting on the Mideast, National Security Adviser Jim Jones was meeting with “key leaders” this week in Israel, the Palestinian Authority and Saudi Arabia to “discuss the full range of regional challenges and opportunities at this critical time in the Middle East,” according to a White House statement.

In the PBS interview, Mitchell portrayed Netanyahu’s 10-month halt on West Bank housing starts as an achievement, saying it was “less than what we asked, but much greater than what any [Israeli] government had done.”

Under the U.S.-backed “road map” plan, Israel is required to freeze all settlement construction.

Abbas wants a Palestinian state on the lands Israel occupied in the 1967 Six-Day War — the West Bank, Gaza and East Jerusalem — but would agree to limited land swaps to accommodate some large Jewish settlements.

“We don’t have any quarrel with Mr. Mitchell. We support his efforts and we want to be part of his success,” said Abbas aide Saeb Erekat. “But people are asking me, ‘If the American administration cannot stop settlements, should we believe they can get the Israelis to accept the 1967 borders?’ ”

Secretary of State Hillary Rodham Clinton said last week that once borders are agreed on, the dispute over settlements would be moot.

“Resolving borders resolves settlements, resolving Jerusalem resolves settlements,” Clinton said. “I think we need to lift our sights and instead of looking down at the trees, we need to look at the forest.”

Netanyahu has not responded publicly to the latest U.S. initiative and was evasive when asked about his position by senior members of his Likud Party.

However, he reiterated that he will not agree to divide Jerusalem and will not permit Palestinian refugees to return to what is now Israel, according to Netanyahu aides who spoke on condition of anonymity because they are not authorized to give information about internal discussions.

With Abbas digging in, Mitchell’s upcoming diplomatic mission could be doomed from the outset. His insistence on a settlement freeze suggests the U.S. approach won’t work.

“No negotiations,” Abbas told reporters Jan. 12 at his headquarters in Ramallah. “We won’t agree to resume negotiations without a full settlement freeze, especially in Jerusalem, for a certain period.”

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