JERUSALEM: Both Israel and the Palestinians face dilemmas this week as direct talks recently relaunched in Washington hang in the balance over the looming expiration of an Israeli settlement moratorium.
Israeli Prime Minister Benjamin Netanyahu faces intense pressure from his right-wing constituency to let the moratorium expire, while Palestinian president Mahmoud Abbas has warned he will walk out if building resumes.
However, neither side wants to be seen as causing the failure of the talks and dealing a blow to US President Barack Obama, who struggled for more than 18 months to get the two leaders back to the negotiating table.
Obama was cautiously optimistic as US Secretary of State Hillary Clinton was due in Egypt on Tuesday for round two of the first direct talks since the outbreak of Israel’s 22-day war on Hamas in the Gaza Strip in December 2008.
"I remain hopeful but this is going to be tough," he told reporters Friday. He said he had urged Netanyahu to extend the moratorium and Abbas to show more flexibility.
Israeli officials speaking privately have said the government will avoid making any formal announcement either way when the moratorium expires on Sept. 26 while quietly preventing any major new construction.
And on Sunday Netanyahu told his right-wing Likud party, which opposes any extension, that "there is all or nothing but there are also halfway options," according to Israel’s Ynet news service.
The Palestinians have meanwhile hinted that despite their repeated warnings they will not be the ones to cause the collapse of the talks, which could do irreparable harm to their relations with Washington.
"These negotiations have been launched and there is no retreating from them," a senior Palestinian official said last week on condition of anonymity.
He added that "it is not in our interest for there to be a complete collapse of the negotiations," and that he believed Israel and the US administration were working on a compromise on settlements.
The Palestinians view the presence of a half million Israelis in more than 120 settlements scattered across the occupied West Bank, including annexed east Jerusalem, as a major threat to the establishment of their promised state.
Some commentators have suggested that quickly reaching a deal on final borders could neutralize the issue of settlements by clearly demarcating where Israel can continue to build.
But on Sunday several Israeli newspapers, citing official sources, said Netanyahu wanted first to address future security arrangements and secure Palestinian recognition of Israel as a Jewish state.
The Palestinians have repeatedly refused to recognize Israel as Jewish, fearing that to do so would endanger their cherished claim to a right of return for refugees from what is now Israel who fled or were driven out during the 1948 Arab-Israeli war and their descendants.
Even if a solution is found to the dispute over settlements, the Palestinians fear the talks will bring more trials that pit them as the weaker party against Israel and its close ally the United States.
The Palestinians had repeatedly refused to go to direct negotiations without a complete settlement freeze including east Jerusalem but reluctantly backed down last month under intense pressure from Washington.
"The Palestinian side was forced to go to these negotiations," said George Giacaman, a professor at Birzeit University in the occupied West Bank.
"If the negotiations stall the American side will give suggestions to the two parties and the Palestinians will have to accept them because they are weaker."
In the end, the Palestinians’ sole bargaining chip may be their own presence at the talks, with a nuclear option of pulling out of the peace process, a move that could further undermine their fragile authority and leave Israel to govern the 2.5 million residents of the West Bank.
"The only strong card the Palestinian Authority has to play in the negotiations is that everyone needs it to continue and not collapse," Giacaman said. "Israel does not want the tensions of returning to the West Bank."
Meanwhile Abbas, like Netanyahu, faces intense domestic pressure not to make concessions on core issues, including from the militant Hamas movement ruling Gaza, which is vehemently opposed to the talks.
"If we have an agreement (Hamas) will disappear, and if we don’t have an agreement then we will disappear," Chief Palestinian negotiator Saeb Erakat told AFP last week. "I really hope that we can make it, God willing."
