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No peace talks unless settlement stops:Abbas

Mitchell due to visit Arab countries to save peace effort

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The Palestinian leadership on Saturday said there would be no peace talks with Israel as long as it continued settlement construction, a spokesman said.

"Our position has not changed. We will not hold negotiations while settlement activity continues," president Mahmud Abbas's spokesman, Nabil Abu Rudeina, told AFP after a special meeting of the Palestine Liberation Organisation (PLO) and top officials from Abbas's Fatah movement.

The PLO, which is headed by Abbas and includes most Palestinian factions but not the militant Hamas movement, was to meet in Ramallah at 1000 GMT with other senior officials from Abbas's Fatah movement, which dominates the group.

They plan to formulate a Palestinian position on the negotiations ahead of an Arab League meeting in Libya later this week at which Abbas plans to announce his final decision on the talks.

The Palestinian leader had frequently threatened to walk out of the direct negotiations launched exactly one month ago if Israel allowed a 10-month moratorium on new West Bank settler homes to expire on September 26.

Israeli Prime Minister Benjamin Netanyahu allowed the restrictions to end despite U.S. pressure, but has said he will restrain settlement construction and repeatedly urged the Palestinians to continue the talks.

Efforts appear faltering

U.S. envoy George Mitchell held meetings with both sides last week before heading off to meet with Arab leaders in a bid to keep the peace talks alive, but Abbas's spokesman said Saturday there had been "no breakthrough."

Middle East envoy George Mitchell was due in Qatar before traveling to Egypt and Jordan as part of efforts to save fledgling Palestinian-Israeli peace talks.

"We continue to urge the parties to continue in these direct talks, and Senator Mitchell will be talking to leaders in the region to encourage them to continue to support this process," State Department spokesman Philip Crowley said.

He said Mitchell would hold meetings in Doha early Saturday before traveling to Cairo and then head to Amman on Sunday.

The envoy, who arrived in the region on Tuesday, and EU foreign policy chief Catherine Ashton shuttled Friday between Jerusalem and Ramallah in a bid to save direct peace talks launched only four weeks ago.

Mitchell met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem and Palestinian president Mahmud Abbas in Ramallah as he sought to break the deadlock over Jewish settlements.

U.S. President Barack Obama's drive to end the six-decade old conflict appeared to be faltering just a month after his administration launched the direct talks in Washington.

"Both the president and the prime minister have agreed that we will continue our discussions, ongoing in an effort to move forward in this process toward what we all share as a common goal: the establishment of comprehensive peace in the Middle East," Mitchell told reporters in Ramallah.

"There remain obstacles. Our determination continues," he said. Earlier in Jerusalem, Netanyahu said: "We are making efforts together with Senator Mitchell to continue to hold the talks with President Abbas. We want the talks to continue."

Abbas says he will pull out of the talks unless Israel extends its 10-month freeze on new building in Jewish settlements in the occupied West Bank, which expired this week.

The Palestinians have long viewed the presence of some 500,000 Israelis in more than 120 settlements scattered across the occupied West Bank and annexed east Jerusalem as a major obstacle to the establishment of a viable state.

The international community considers all settlements illegal.

Abbas has said he will take no final decision until the Arab League has discussed the issue. There were indications on Friday that the Oct. 4 date for an Arab League consultation would be set back to Oct. 8 at the request of U.S. ally Egypt.

European Union foreign affairs chief Catherine Ashton said after talks with the principals that major powers engaged in the process were "very concerned that the ending of the moratorium should not put at risk the possibility of long-term peace".

Both the president and the prime minister have agreed that we will continue our discussions, ongoing in an effort to move forward in this process toward what we all share as a common goal: the establishment of comprehensive peace in the Middle East

Middle East envoy George Mitchell

Proposal rejected

Netanyahu is refusing to extend the construction moratorium and Israeli reports said he had rebuffed a U.S. offer of "very generous" incentives to persuade him to extend it by 60 days.

One official quoted Netanyahu as telling his advisors that it was not easy to freeze construction for the past 10 months and that he had lived up to his commitments to the Palestinians, the United States and the international community.

"Now I expect the Palestinians to show some flexibility," Netanyahu was quoted as saying. "Everyone knows that measured and restrained building in Judaea and Samaria (the West Bank) in the coming year will have no influence on the peace map."

Obama has invested major political capital in a bid for a Middle East settlement within a year.

Israeli media suggested he was desperate to have Netanyahu agree to keep the talks alive by keeping settlement construction frozen, and was furious at being rebuffed.

A U.S. State Department official denied reports that Obama sent Netanyahu a letter proposing security guarantees, including a continued Israeli troop presence in the Jordan Valley after the creation of a Palestinian state.

But an Israeli official, who requested anonymity, confirmed that "the White House made an offer of incentives to Israel as described in the media but these were rejected by Netanyahu".

Israel's Yedioth Ahronoth daily said Obama had not signed off on the offer. The security proposals were floated in a paper drawn up last week by Israeli Defense Minister Ehud Barak and White House Middle East aide Dennis Ross, it said. It would have become a "presidential letter" only if Netanyahu had accepted.