Peace talks in 'crisis', says Abbas

AFP - The Middle East peace process lay in tatters Wednesday after Washington admitted defeat in its efforts to secure an Israeli freeze on settlement building, the Palestinians' condition for resuming talks.

However, the United States said it is still holding out hope that a peace deal can be reached next year.

US officials admitted late on Tuesday that efforts to coax Israel into imposing new curbs on West Bank settlement construction had gone nowhere, prompting Palestinian president Mahmud Abbas to declare a crisis in peace efforts but delighting Israeli hardliners.

Without a new freeze, the Palestinians have refused to negotiate, effectively deadlocking direct peace talks that began on September 2, only to run aground three weeks later when building resumed in the settlements.

"We have been pursuing a moratorium as a means to create conditions for a return to meaningful and sustained negotiations," US State Department spokesman Philip Crowley said.

"After a considerable effort, we have concluded that this does not create a firm basis to work towards our shared goal of a framework agreement."

Speaking in Athens on Wednesday, Abbas said: "There is no doubt that there is a crisis," and his spokesman Yasser Abed Rabbo said it was likely the two sides would have to return to indirect "proximity talks."

"This impasse has led the US administration to choose another method, which is returning to indirect talks ... to move the peace process past this impasse and address the final-status issues," he told Voice of Palestine radio.

Chief Palestinian negotiator Saeb Erakat said his side now hoped Washington would recognize a Palestinian state.

"We hope that the American administration would recognise the Palestinian state within the 1967 borders as a response to Israel's settlement diktats and other unilateral measures," Erakat said in Cairo, speaking on the sidelines of a meeting between Abbas and Arab League chief Amr Mussa.

Israeli and Palestinian officials are expected to visit Washington next week for separate talks with the Americans on ways to keep the peace process alive, Crowley said.

"We will continue to try to find ways to create the kind of confidence that will eventually, we hope, allow them to engage directly," he said.

"We're shifting our approach, but are still focused on the goal of a framework agreement within a year. We believe that's still achievable."

"Obviously a lot of hard work is going have to be done; it's not going to easy, but we haven't changed our objective" set in August of reaching a peace agreement within 12 months.

A spokesman for Israeli Prime Minister Benjamin Netanyahu said Washington's announcement marked a welcome acknowledgement by President Barack Obama's administration that freezing construction was not the way to achieve peace.

"We said from the outset that settlements were not the root of the conflict and that it was only a Palestinian excuse for refusing to talk," Nir Hefetz said.

Washington has been trying for weeks to convince Netanyahu to impose a new moratorium on settlement construction in the occupied West Bank.

However, Crowley clarified that the announcement did not signify a change in US opposition to settlements in the West Bank, saying Washington "does not accept the legitimacy" of new construction there.

"Our position on settlements has not and will not change," Crowley said.

A 10-month freeze expired on September 26, shortly after the launch of new peace talks -- the first direct ones in nearly two years.

As the crisis unfolded, Abbas flew to Cairo where he was meeting Wednesday with Arab League chief Amr Musa and Egyptian intelligence chief Omar Suleiman.

He was to hold talks on Thursday with Egyptian President Hosni Mubarak before deciding on his next move.

Earlier on Wednesday, Mussa said Arab League diplomats would meet in Cairo on Saturday or Sunday to "discuss future Arab action" in light of the US announcement.

The Israeli right expressed delight at the government's refusal to give in to pressure from its main ally, with deputy parliament speaker Danny Danon praising Netanyahu for rebuffing US calls for another "damaging and pointless" freeze.

The Islamist movement Hamas, which controls the Gaza Strip, said US failure to secure any concession from Israel vindicated its longstanding opposition to the policy pursued by Abbas's Fatah party, its longstanding rival.

"Fatah has lost its gamble of counting on Washington as the US position on the Palestinian question is always utterly dependent on Israel," Hamas spokesman Fawzi Barhum said.