No news emerged of any compromise on settlements after Tuesday’s trilateral negotiations
Israeli and Palestinian leaders are to hold further talks in Jerusalem, a day after discussing the core issues behind the conflict at meetings in Egypt.
US Middle East envoy George Mitchell, who helped broker Tuesday’s delicate negotiations, said he believed they were “moving in the right direction”.
But the talks failed to produce any visible progress on the divisive issue of Jewish settlements on occupied land.
Israel has so far refused to extend a partial ban on new construction.
The Palestinian Authority has threatened to walk out of the talks if building work resumes when the restrictions expire on 30 September.
Negotiations began in Washington only two weeks ago, after a 20-month gap.
No news emerged of any compromise on settlements after the trilateral negotiations between Israeli Prime Minister Benjamin Netanyahu, Palestinian Authority President Mahmoud Abbas and US Secretary of State Hillary Clinton in the Red Sea resort of Sharm-el-Sheikh.
However, Mr Mitchell described the discussions as “very serious, detailed and extensive”, and said the two sides had reiterated their intent to approach them in good faith.
“President Abbas and Prime Minister Netanyahu continue to agree that these negotiations, whose goal is to resolve all core issues, can be completed in one year,” he told a news conference.
George Mitchell said leaders had reiterated their intent to approach the negotiations in good faith
“We continue our efforts to make progress and we believe that we are moving in the right direction, overall.”
He also repeated Mrs Clinton’s call for Israel to extend its freeze on settlement construction in the West Bank.
“We know this is a politically sensitive issue in Israel. But we’ve also called on President Abbas to take steps that help encourage and facilitate this process.”
Nearly half a million Jews live in more than 100 settlements built since Israel’s 1967 occupation of the West Bank and East Jerusalem. They are held to be illegal under international law, although Israel disputes this.
President Abbas’s spokesman, Nabil Abu Rudeina, described Tuesday’s talks as “serious and deep, but the obstacle of settlements still exists”.
Mr Netanyahu’s spokesman said both sides had to make hard decisions.
“The way to an agreement is to look at all the core issues together, not to run away from any one of them,” Mark Regev told the Associated Press.
“If the expectation is that only Israel has to show flexibility then that is not a prescription for a successful process.”
On Sunday, Mr Netanyahu said he could not extend the ban, but would not allow thousands of planned homes to be built.
US officials said two concessions which Mr Abbas could make were recognising Israel as the Jewish homeland, something the Palestinians have so far resisted, and agreeing quickly to the borders of a future Palestinian state.
Mr Mitchell said the trilateral peace talks would continue on Wednesday afternoon in Jerusalem, followed by lower-level discussions between Israeli and Palestinian negotiating teams in the coming days.
The status of Jerusalem is itself one of the most divisive issues. Israel claims the city as its eternal, undivided capital, while the Palestinians want East Jerusalem to be the capital of any future Palestinian state.
Another problem facing negotiators is that only one part of the Palestinian territories is represented because the Islamist movement Hamas, which controls the Gaza Strip, opposes the talks.
A senior Hamas leader in Gaza, Mahmoud Zahhar, told the BBC the movement would not attempt to stop the talks because they would “reach an end, as previous ones” by themselves.
Last week, four Jewish settlers were killed when their car came under fire near the West Bank city of Hebron. Hamas said it was behind the attack.
Hours after Tuesday’s talks, a Palestinian man was killed in an exchange of fire with Israeli forces in northern Gaza.
The Israeli military said a group of militants had fired a rocket-propelled grenade at its troops.
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