Although the Palestinian position remains that all settlement is illegal, Hanan Ashrawi, the delegation spokeswoman, said yesterday that the offer from Yitzhak Rabin, the new Israeli Prime Minister, of a temporary freeze was 'encouraging' and now the Palestinians would await further detail and demonstrations of 'good faith'. She added: 'We did not say (to Mr Baker) that we want to see a total settlement freeze before we negotiate.'
Furthermore, during the meeting the Palestinians signalled to Mr Baker they would not insist that the US maintain its position that release of dollars 10bn in loan guarantees to Israel is dependent on a total freeze. The only condition the Palestinians put to Mr Baker was that, if the US does decide to unblock the money, it should not be spent on continuing building in the occupied territories. Mrs Ashrawi stressed that if newly released US money were used for settlement, this would disqualify the US from its role as peace- broker.
Both Palestinian declarations firmly shelve fears that Palestinian objection to Mr Rabin's offer of a partial freeze might have threatened new peace talks. The Palestinian flexibility will also encourage the US to release swiftly the loan guarantees, frozen because of aggressive settlement by the previous Likud government.
In the strongest hint yet that the loan guarantees are close to being released, Mr Baker said last night, after ending his two-day visit to Israel during which he held his first direct talks with Mr Rabin, that the Bush administration now saw the release of loan guarantees as 'a very high priority'.
The positions set out yesterday by the Palestinians constitute a significant softening of their stance on the settlement question and display a desire to enter fully into the spirit of the new diplomatic game of give and take.
It remains to be seen how much of the new game is bluff. That may only become apparent when the new round of negotiations get started, perhaps next month.
Mrs Ashrawi said yesterday: 'Every time the Israelis go one concrete step forward in terms of changes on the ground we certainly will acknowledge that in many different ways.'
But she also warned that the world does not have a 'predisposition' to see all actions of the new Israeli government in a good light. Her comments also tend to confirm the view that the Palestinians do feel under tremendous new pressure to compromise, now that Mr Rabin is making positive moves and Israel is friends again with the US.
However, as Mr Baker leaves Jerusalem today for a tour of Arab countries he will have strong evidence to argue that there has been enough evidence of new commitment - most notably from the new Israeli Prime Minister - to have already produced declarations of good intent previously unheard of in the peace process.