US envoy fails to break stalemate on settlements

Current US efforts to kick-start serious negotiations on a future two state solution to the Israel-Palestinian conflict were in the balance yesterday after presidential envoy George Mitchell failed to bridge the gap between the two sides on settlement construction.

Mr Mitchell completed a round of shuttling between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas without—so far—securing a formula for a settlement freeze that both sides could agree on.

The continuing stalemate came as a new World Bank report largely endorsed Palestinian Prime Minister Salam Fayyad's plan to make ready for a state within two years. It said that if current institutional progress was maintained the Palestinian Authority was "well-positioned for the establishment of a Palestinian state at any point in the near future."

The US has been seeking a freeze on Jewish settlement building in the West Bank —along with reciprocal "normalization" gestures by Arab states— to improve the atmosphere for talks. Mr Netanyahu has insisted that 2,500 housing units deemed to be under construction in the settlements should go ahead and authorized starts on another 450 ahead of any freeze.

The moderate Palestinian leadership has been arguing that such a "freeze" would be one only in name and are also concerned by Mr Netanyahu's repeated assertions that there would be no halt on building in East Jerusalem over which Israel claims sovereignty but Palestinians see as the capital of a future Palestinian state.

Mr Mitchell met Mr Netanyahu twice, before and after a meeting with Mr Abbas yesterday. Mr Abbas's chief negotiator Saeb Erekat said "We once again reiterated that there are no middle ground solutions for settlements. A settlement freeze is a settlement freeze."

The US has been pressing for a three way meeting between President Obama, Mr Netanyhau, and President Abbas during the General Assembly in New York next week. An official in Mr Netanyahu's office last night acknowledged "gaps" between the Palestinians and Israel and said that the Prime Minister at present planned to travel as normal to New York on Wednesday ahead of a speech he is due to give to the Assembly on Thursday.

However contingency plans had been made for him to travel earlier in case Mr Obama did convene a three way meeting with Mr Abbas. The official insisted that Mr Netanyahu was ready to start immediate negotiations. While Mr Erekat did not wholly rule out a three way meeting he said it would be "meaningless" without a change of heart by Mr Netanyahu.

Meanwhile the World Bank report said that security had "improved dramatically" in the West Bank. It projected five percent growth in the Palestinian economy and said Israel had taken "significant steps" to ease Palestinian movement within the West Bank. But it warned that heavy restrictions on Palestinian access to markets, land investment, water and telecommunications frequencies were still severely inhibiting sustainable economic improvement.

While it warned that a state would require reunification of Gaza and the West Bank, and identified continuing deficiencies in the judiciary and land management, it said of the PA that "relative to other countries in the region, the public sector in West Bank and Gaza is arguably already more effective and efficient."

Mr Netanyahu yesterday telephoned Gordon Brown, Italian Prime Minister Silvio Berlusconi and Russian President Dmitry Medvedev to press his case that the UN Security Council should not implement the Goldstone repiort on Israel's military operation in Gaza last winter.

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