PLO demands settlements freeze before peace talks

Leaders of the main moderate Palestinian factions yesterday voted to oppose further negotiations while building continues in Jewish settlements, amid increasing US frustration at Israel's refusal to prolong a 10-month moratorium on construction.

The Palestinian Liberation Organisation executive decided that any resumption of direct peace talks – the first for 21 months – "requires tangible steps, the first of them a freeze on settlements". A senior PLO official, Yasser Abed Rabbo, said after yesterday's meeting in Ramallah: "The Palestinian leadership holds Israel responsible for obstructing the negotiations."

Although not unexpected, the move by the PLO underlines the depth of the crisis over the future of the talks after repeated efforts by the US, and the international Middle East envoy Tony Blair, to persuade the Israeli Prime Minister, Benjamin Netanyahu, to prolong the partial freeze on settlements instituted late last year.

While the PLO is the over-arching body representing the main Palestinian factions, apart from Hamas and Islamic Jihad, the final response to Mr Netanyahu's refusal to extend the freeze is likely to await a meeting of the Arab League. That meeting is currently scheduled for Wednesday, though there is increasing speculation that it will be postponed for another 48 hours, to Friday, to allow US mediators more time for the uphill struggle to promote an 11th-hour compromise to save the talks.

Diplomats report increased annoyance in Washington over Mr Netanyahu's rejection of a draft letter drawn up by the State Department and a senior Israeli official promising – in return for a 60-day extension of the moratorium – massive military aid, a veto on any UN Security Council resolution criticising Israel over the next year, and support for a continued Israeli military presence in the Jordan Valley after the launch of a Palestinian state. The draft also reportedly contained a pledge not to ask for a further extension after the 60-day period ran out.

US presidential envoy George Mitchell and EU High Representative Cathy Ashton both visited the region last week in a vain effort to break the impasse.

Meanwhile, Mr Netanyahu has been pinning the blame for deadlock on the Palestinians, saying that the partial freeze had been ordered 10 months ago, but that Mahmoud Abbas, the Palestinian President, only agreed to direct negotiations starting last month. "Now I expect the Palestinians to show some flexibility. Everyone knows that measured and restrained building in Judea and Samaria [the West Bank] in the coming year will have no influence on the peace map."

Mr Netanyahu repeatedly says that he is prepared for talks "without preconditions". But Mr Abbas and his negotiating team point out that they are asking for no more than did the 2003 internationally agreed Road Map, which called for a complete halt to settlement activity – which most of the international community regards as illegal under international law – and the withdrawal of settlement outposts illegal even under Israeli law.

But without an immediate end to the impasse in sight, yesterday's PLO decision was endorsed publicly by Nabil Abu Rudeineh, spokesman for Mr Abbas, who told reporters after the executive meeting: "There will be no negotiations in the shadow of continued settlement."

The PLO executive is dominated by Mr Abbas's faction, but also includes a number of independents and smaller factions who have been vociferous in opposing a resumption of direct negotiations without a halt to building in the West Bank settlements. Failing a breakthrough, Mr Abbas has already been reported to be planning "a historic announcement" at the Arab League meeting. There is unconfirmed speculation that this could be a formal request to the 22-member league to ask the UN Security Council to condemn Israel's settlement policy, or that it could be an imminent agreement with Hamas on inter-faction reconciliation, or both.

The first would cause a considerable headache for Washington, which would have to decide whether to veto such a resolution, while the second carries the risk that it could provide Israel with a ready-made reason – or excuse – for abandoning efforts to continue the talks.