Egypt tells Israel to stop "judaizing" Jerusalem

Egypt's President Hosni Mubarak called on Israel to halt "all settlement activity" and warned of the dangers of "judaizing" Jerusalem, in talks with Israeli Prime Minister Benjamin Netanyahu in Cairo on Sunday.

Mubarak "called on Israel to stop all settlement activity, including 'natural growth' settlements," presidential spokesman Suleiman Awad said after the talks.

The president "also urged (Israel) to stop attempts to judaize Jerusalem, warning of the dangerous consequences to peace efforts and highlighting the sensitivity of the Jerusalem issue to the Arab and Islamic worlds," Awad said.

Netanyahu met Mubarak over "iftar", the meal ending the dawn-to-dusk fast during the Muslim holy month of Ramadan that was also attended by Egypt's intelligence chief Omar Suleiman.

The short trip comes amid a renewal of diplomatic activity around the Israeli-Palestinian peace process and coincides with a visit to the region by U.S. envoy George Mitchell.

Earlier in the day Netanyahu told Israel's cabinet: "I hope that we will succeed in reducing the gaps (in the peace process)."

The president also urged Israel to stop attempts to judaize Jerusalem, warning of the dangerous consequences to peace efforts and highlighting the sensitivity of the Jerusalem issue to the Arab and Islamic worlds

Presidential spokesman

"Maybe we will bridge them, so that we can move the process forward."

Netanyahu's departure for talks with Mubarak in Cairo marked his second meeting with the Egyptian leader since May.

The thorny issue of Israeli settlement construction on occupied Palestinian land was likely to top the agenda of talks in both Jerusalem and Cairo, with Washington pushing for -- and Israel so far resisting -- a total freeze.

In addition to the peace process, Netanyahu and Mubarak were expected to discuss a proposed prisoner exchange that would see the release of Israeli soldier Gilad Shalit, seized by Gaza fighters more than three years ago, in return for hundreds of Palestinian prisoners held in Israeli jails.

Egypt has been brokering the indirect talks on the prisoner exchange between Israel and the Islamist Hamas movement which controls the Gaza Strip. Germany has also joined the mediation efforts.

I hope that we will succeed in reducing the gaps

Israeli PM

Sense of urgency

Meanwhile Mitchell said that Washington shared a "sense of urgency" and was aiming to reach agreement on any outstanding issues during his trip.

"It is our intention to conclude this phase of our discussions in the very near future... (to) enable us to move on to the next and really the more important phase," he said after talks with Israeli President Shimon Peres.

Peres, meeting Mitchell just hours after being discharged from hospital after a fainting scare, said that "there is an urgency to resume negotiations before the end of this month."

"I think that the time is really right to do so," he said.

The outcome of Mitchell's talks in Israel is likely to determine whether Netanyahu and Palestinian president Mahmoud Abbas meet for the first time later this month on the sidelines of the U.N. General Assembly along with U.S. President Barack Obama.

Mitchell also met Israel's foreign minister on Sunday and was due to see the defense minister later in the day. He was to meet Netanyahu on Monday and Abbas on Tuesday. It was not clear whether he would visit other countries in the region.

Ahead of Mitchell's latest trip, the Palestinians reiterated that they will not back down from their demand for a complete settlement freeze. Netanyahu said Israelis were ready for talks, but were not "suckers."

It is our intention to conclude this phase of our discussions in the very near future...to enable us to move on to the next and really the more important phase

US envoy George Mitchell

Settlement freeze

Washington has been trying for months to secure an Israeli settlement freeze while pressing Arab states for reciprocal concessions to clear the way for a resumption of Israeli-Palestinian talks that were suspended in late December.

While Israel has agreed to a temporary halt, it has also authorized the construction of hundreds of new homes in advance of the moratorium in a move criticized by the European Union, the United States and the Palestinians.

The Palestinians have said they will not resume talks -- and Arab leaders have said they will not take steps to normalize relations with Israel -- without a complete halt to settlement construction.

Israel and the Palestinians revived their peace talks in November 2007 after a nearly seven-year hiatus, but the negotiations made little progress and were suspended in December 2008 after the start of Israel's war on Gaza.

Both sides remain deeply divided on the most sensitive issues of their decades-old conflict -- final borders, the status of Jerusalem and the fate of Palestinian refugees and Israeli settlements.

A report in the left-leaning Haaretz daily on Sunday quoted unnamed Palestinian and EU sources as saying that the two sides will resume talks in October on the basis that the establishment of a Palestinian state will be announced in two years.