Netanyahu raises stakes with US over settlements in East Jerusalem

Israeli Prime Minister Benjamin Netanyahu has rejected US demands to freeze Jewish construction in East Jerusalem, creating a key stumbling block to renewed peace talks just as Washington's Middle East envoy arrived in town.

"I am saying one thing. There will be no freeze in Jerusalem," Mr Netanyahu said in comments broadcast on Israel's Channel 2 last night. "There should be no preconditions to talks."

The Israeli leader had formally responded to the Obama administration's freeze request at the weekend, The Wall Street Journal reported.

His public comments, made just after George Mitchell's arrival for his first visit in six weeks, seemed timed to undermine the US envoy's bid to revive negotiations between the Israelis and Palestinians.

The Palestinians have called for a full construction freeze in the West Bank and annexed East Jerusalem, captured by Israel in 1967, before they will agree to return to peace talks, which have been stalled now for more than a year. "It's a disaster," said Moshe Ma'oz, professor of Islamic and Middle Eastern studies at Jerusalem's Hebrew university. Jewish settlements are "the crux of the matter for the Palestinians. I don't see what is holy to Jews about [Palestinian neighbourhoods] Abu Dis and Sheikh Jarrah".

The timing of Mr Netanyahu's decision sends a strong message to US President Barack Obama, who has invested significant political capital in securing a peace deal in the Middle East.

Mr Obama reportedly presented Mr Netanyahu with a list of measures, among them a construction freeze, during a fraught meeting at the White House in late March aimed at bringing Palestinians back to the negotiating table. Washington put its shuttle diplomacy efforts on hold while it awaited Israel's response.

Jewish construction in East Jerusalem, internationally recognised as occupied territory, is a deeply contentious issue. Some 180,000 Jews live there, and 250,000 Palestinians. Palestinians claim East Jerusalem as the future capital of an independent Palestinian state, and fear Israel is seeking to predetermine its fate and make them a minority there. Mr Netanyahu has insisted that Israel will retain control over an undivided Jerusalem.

Mark Regev, Mr Netanyahu's spokesman, insisted yesterday that Israel was committed to peace talks with the Palestinians. "We are working with the US to restart the talks, and we want that to happen," he said.

In a bid to show willing, Israel has agreed to several other concessions, such as easing the flow of goods into the Gaza Strip, which has been under Israeli blockade since 2007, the release of Palestinian prisoners and the removal of some roadblocks in the West Bank, The WSJ reported.

But Israel's lack of movement on settlements will likely complicate Mr Mitchell's mission as he seeks to coax the Palestinians back to the table. Palestinian chief negotiator Saeb Erekat said yesterday that he hoped Mr Mitchell would convince Israelis to "give peace a chance" by halting settlements.