Netanyahu in crisis talks with cabinet

Discussions were under way to chart out a response to a list of demands made by the US to pave the way for indirect peace talks with the Palestinian Authority.

JERUSALEM // The Israeli prime minister Benjamin Netanyahu was meeting his inner circle of cabinet ministers last night to discuss a response to a list of demands made by the US to pave the way for indirect peace talks with the Palestinian Authority. The crisis discussions were underway as Arab leaders headed to the Libyan town of Sirte to rally opposition against growing Jewish settlements in East Jerusalem at the annual Arab League summit.

Already, in their first sign of unity, they have pledged US$500 million (Dh18.35m) to the Palestinians to counter the presence of Jewish settlers in the city. But Mr Netanyahu, who governs with a far right coalition, is showing no signs of backing down on the building of houses for Jewish settlers in Israeli-occupied East Jerusalem. "I, myself, plan to continue building in Jerusalem as all the previous prime ministers did before me," he said, according to Haaretz newspaper yesterday, dismissing claims that he was beholden to an extremist coalition of religious parties that refuse to compromise. "I do not need coalition partners to pressure me into continuing to build in Jerusalem."

The Obama administration has demanded that Israel immediately halt settlement building in the West Bank and East Jerusalem in a bid to start the proximity talks mediated by its special envoy, George Mitchell. The Palestinian Authority has refused to enter talks until all settlement construction is stopped. Under international law, the housing for 500,000 settlers - and growing - in the West Bank and East Jerusalem are illegal. Both have been occupied by Israel since 1967.

Mr Netanyahu's hardline stance over the city that is home to the third holiest shrine in Islam, al Haram al Sharif, or the Noble Sanctuary, has caused a growing sense of alarm in the Arab and Muslim world. In Jerusalem and the West Bank, protests after Friday prayers are common, and yesterday a clash between Israeli forces and Palestinians along the border with Gaza left two Israeli soldiers and two Palestinians dead.

In Libya, the Arab League summit has already been labelled as the "Jerusalem summit". "It's certain they'll issue some kind of statement, but they're not going to do anything about it," said Marina Ottaway, director of the Middle East Program at the Carnegie Endowment for International Peace, a Washington, DC-based think tank. "The important question is whether the US is going to back down on the issue of settlements in East Jerusalem," she said. "If Obama stands firm, it could isolate the Israelis."

Early yesterday, the prime minister's spokesman, Nir Hefetz, said Mr Netanyahu had reached a "series of understandings" with Mr Obama that would mean the continuation of building settlements in East Jerusalem. "We returned from the US with the understanding that on the one hand, the construction policy in Jerusalem will remain unchanged, and on the other, Israel is prepared to make gestures in order to resume the peace process," Mr Hefetz told Israel's Army Radio.

But later on, Mark Regev, a government spokesman, issued a clarification saying that Mr Hefetz was "articulating the Israeli position, he is not articulating a joint position". And even if he wanted to, Mr Netanyahu, the leader of the Likud party, might not be able to act immediately because of internal political problems. "Netanyahu cannot stop the building of Jewish neighbourhoods in East Jerusalem simply as an act of good faith. At least in Israel it would be perceived as dramatic concession, which should be preserved for final status negotiations," said Einat Wilf, a Knesset member of the Labour party, which is part of Mr Netanyahu's governing coalition.

Dr Moshe Amirav, a political science professor at Beit Berl college and former adviser to the defence minister, Ehud Barak, said a resolution was likely. "Knowing Likud and knowing Netanyahu, they agreed secretly already to separate Jerusalem but the question is where to draw the line," he said, adding the broad parameters for a peace plan have been around for years. "Ambiguity is the name of the game. As we talk, the cabinet is trying to formulate a response which means 'how are we going to say yes without saying no'.

"I'm sure we'll find a formula. It must satisfy Arab governments but will be ambiguous enough about whether or not we will build settlements because Netanyahu needs to keep the coalition together." @Email:[e-mail] [e-mail] John Thorne reported from Rabat.