U.S. welcomes Palestinian counterproposal to Netanyahu’s settlement freeze offer

Palestinian Authority considering state declaration with Western recognition

Netanyahu reiterates continued construction works on settlements

Paris summit brining together Mubarak, Sarkozy, Abbas, Netanyahu postponed to November

Responding to an offer by Israeli Prime Minister Benjamin Netanyahu to extend a freeze on building in West Bank settlements if Palestinians recognize Israel as the Jewish state, a top Palestinian official said that such recognition could be granted to Israel within its 1967 borders, without the West Bank, the Gaza Strip and East Jerusalem.

In media interviews, Yasser Abed Rabbo, a senior official of the Palestinian Liberation Organization, countered Netanyahu's offer in another volley of the verbal ping-pong that has taken the place of direct negotiations.

The talks that began last month ran aground after an Israeli moratorium on new construction in West Bank settlements expired Sept. 26 and Palestinians said they would not resume negotiations unless settlement building stopped.

Netanyahu's offer, made in a speech to the Israeli parliament last week, was instantly dismissed by the Palestinians.

In an interview with Israel Radio, Abed Rabbo made a barbed offer of his own. He suggested that the Israelis present the Palestinians with "a map of the state of Israel along the 1967 borders, so that we can recognize it with any formula it likes."

"We will recognize it according to what Israel declares, on condition that it will be along the 1967 borders," he said.

Israel has long rejected a return to the 1967 boundaries and has sought to retain large settlement blocs in the West Bank as part of a future peace agreement with the Palestinians.

The Palestinian counterproposal came after U.S. State Department spokesman P.J. Crowley urged the Palestinians to respond to Netanyahu's offer with their own ideas.

"This is not a one-way street. It is a two-way street," Crowley said. "The prime minister is offering something and asking for something. It is perfectly within the rights of the Palestinian Authority and President Abbas to say, 'There's something I need, and there's something I'm willing to give.' This is the essence of the negotiation that is ongoing."

The Obama administration is working to resolve the impasse over the settlements and has urged an extension of the building freeze while future borders are negotiated. Once the borders are drawn, it would be clear which settlements could remain or would have to be dismantled.

"If we can make progress on the issue of borders, then, largely speaking, the issue of settlements is then resolved," Crowley said.

Netanyahu played down new Israeli construction on land Palestinians seek for a state, urging them to return to peace talks halted over the resumption of settlement building.

"The discourse about new building is an artificial obstacle," said Netanyahu, who has resisted Palestinian and international calls to extend a partial construction freeze in West Bank settlements.

Palestinians charge that settlement building in East Jerusalem and the West Bank, areas Israel captured in a 1967 war, undermines efforts to build a viable, contiguous Palestinian state.

"The new construction is inconsequential. It has absolutely no effect on the map of a possible (peace) agreement," Netanyahu told reporters at a meeting with legislators from his right-wing Likud party.

He made the remarks four days after the government announced a plan to erect 238 more homes in Pisgat Zeev and Ramot, urban areas settled by Jews in a part of the West Bank that Israel annexed to Jerusalem after the 1967 conflict in a move never accepted by the international community.

Palestinian negotiator Saeb Erekat said the projects showed Israel was choosing "settlements over peace" and demonstrating "why there are no negotiations today."

U.S.-brokered talks began on September 2 but the Palestinians suspended them after a 10-month moratorium on housing starts in West Bank settlements expired on September 26.

Calling on Palestinian President Mahmoud Abbas to have a "face-to-face" meeting with him, Netanyahu said: "If they (the Palestinians) want to solve problems, I can think of numerous ways to bridge this gap and to make progress in the talks.

The end of Israel's partial construction freeze has led to renewed building in a handful of West Bank settlements amid U.S. opposition to such construction and Washington's diplomatic efforts to revive the negotiations.

A senior Israeli official said more extensive building plans for East Jerusalem had not been announced "to avoid sabotaging talks with the Americans" on salvaging peace efforts.

Palestinians want East Jerusalem as the capital of the state they hope to establish in the West Bank and Gaza Strip. Israel considers all of Jerusalem as its capital, a position that has not won international recognition.

Israel has insisted East Jerusalem was never part of its construction freeze, though many building plans in Israeli-annexed parts of the city were quietly put on hold after Washington was embarrassed by tenders leaked during a March visit by U.S. Vice President Joseph Biden.

Israel says the settlement issue should be resolved in discussions about future borders and not serve as a precondition for talks.

Some 500,000 Israelis live in the West Bank and East Jerusalem among 2.5 million Palestinians.

A planned October 21 summit in Paris between Israeli Prime Minister Benjamin Netanyahu, Palestinian president Mahmoud Abbas and Egyptian President Hosni Mubarak has been postponed, the premier's office said.

"Following consultations, the parties concerned have agreed to decide on another date," a statement from Netanyahu's office said.

The French presidency had raised the possibility of the meeting previously announced by President Nicolas Sarkozy not going ahead Thursday as planned, following the suspension of direct peace talks between Israel and the Palestinians.

Chief Palestinian negotiator Saeb Erekat implicitly confirmed the postponement of the Paris gathering.

"The continuation by Israel of settlement activity ruins all peace efforts, be they those of (US) President Barack Obama or those of President Nicolas Sarkozy," he told AFP.

He added that in any case the Palestinian Authority "has not received an official invitation, giving a date, for such a meeting."

Earlier last week, the French foreign ministry said it was "deeply disappointed" with Israel's plans to resume building homes for settlers in east Jerusalem, and urged Netanyahu's government to reconsider.

"This decision is inopportune. France is deeply disappointed," ministry spokesman Bernard Valero said in a statement.

"France calls on the Israeli authorities to reconsider this decision."

Israel announced plans to build 238 new homes in east Jerusalem, provoking anger from the Palestinian Authority and criticism from its key ally the United States.

US-brokered direct peace talks launched in early September ground to a halt within weeks after the expiry of a 10-month moratorium on the construction of new settler homes in the occupied West Bank.

Abbas has refused to hold further negotiations while settlement construction in the West Bank continues, and a week ago Arab League foreign ministers gave US negotiators a month to try to resolve the impasse.