Israel, Palestinians set for indirect talks

JERUSALEM (Reuters) - U.S.-mediated talks with the Palestinians could begin next week, Israel said on Thursday, but it played down chances of a quick deal to end the conflict and Hamas condemned the Palestinian president's move to negotiate.

Israeli Prime Minister Benjamin Netanyahu said he hoped to start the indirect diplomacy with Palestinian President Mahmoud Abbas once U.S. President Barack Obama's special envoy arrives in the region early next week to shuttle between them.

But Netanyahu's hawkish foreign minister, a key member of the coalition cabinet, poured cold water on any hopes of a rapid settlement of a conflict that has lasted over 60 years.

Obama's secretary of state Hillary Clinton had expressed the hope after Abbas won support from the Arab League on Wednesday that the "proximity talks" -- essentially a pepped-up version of the past few months of shuttle diplomacy by U.S. envoy George Mitchell -- would relaunch the two sides on a path to founding a Palestinian state that could live in peace alongside Israel.

But Israeli Foreign Minister Avigdor Lieberman, leader of a right-wing party that appeals to Russian-speaking immigrants and himself a resident of the West Bank settlements that Washington says are an obstacle to peace, said on Thursday that while talks were welcome, a deal still seemed a distant objective.

"I don't believe it is possible to reach a comprehensive deal in the near future," Lieberman told a news conference.

Palestinian officials said they wanted the U.S.-mediated talks to focus initially on defining the borders of a state they hope to establish in the West Bank and Gaza Strip. But a final definition of a border between the West Bank and Israel means settling the dispute over Jerusalem and its holy sites -- Netanyahu defends Israeli control over the whole city, Abbas wants the eastern part captured by Israel from Jordan in 1967.

HAMAS CONDEMNATION

After months of stalemate in which Abbas resisted U.S. calls to drop his condition that Israel halt all Jewish settlement building in the West Bank and East Jerusalem before he would end a 14-month hiatus in negotiation, Arab League foreign ministers gave their blessing to four months of indirect talks.

"Our ultimate objective is to try to achieve a peace settlement with our Palestinian neighbors by means of direct talks," Netanyahu said of the 20-year-old peace process. "But we always said we don't necessarily insist on the format."

Abbas's decision to negotiate despite dissatisfaction with a temporary and partial settlement pause ordered by Netanyahu in November was condemned by his Hamas Islamist rivals, who control the Gaza Strip and remain popular, too, in the West Bank.

"The decision to go back to the talks gives the Israeli enemy the cover to continue settlements. There will not be anything left to negotiate on," Izzat al-Rishq, a senior Hamas official, told Reuters in the Syrian capital Damascus.

"Mahmoud Abbas has to step aside," said Rishq, who is a member of Hamas's politburo. "Resuming these talks is selling illusions to the Palestinian people and playing with their emotions. Eighteen years of talks with Israel have achieved zero. What is there to expect from an extra four months?"

The schism in Palestinian leadership between Abbas and Hamas is cited by Israeli leaders as an obstacle to any final deal.

Netanyahu said he was heartened: "I welcome the fact this ripening has begun, which I hope will lead to the start of talks with the visit of Senator Mitchell to Israel next week."

Abbas's chief negotiator Saeb Erekat said charting borders for a Palestinian state in four months was essential. This may include swapping some territory, he said.

Netanyahu has not said whether he would be open to trading territory in Israel for major settlement blocs in the West Bank.

Asked about Erakat's comments, Mark Regev, a spokesman for Netanyahu, said: "The Palestinians can bring to the negotiation all of their concerns, and we will bring ours -- first and foremost Palestinian recognition of Israel's legitimacy as a Jewish state, and demilitarization."

George Giacaman, an analyst at Birzeit University in the West Bank, said the aim of the proximity talks appeared partly to avoid a political vacuum that could be filled by violence.

"The main issue is conflict management," he said. "Hardly anyone expects that they will lead to a breakthrough."

(Additional reporting by Ali Sawafta in Ramallah, Joseph Nasr in Jerusalem and Khaled Yacoub Oweis in Damascus; writing by Jeffrey Heller and Alastair Macdonald in Jerusalem; Editing by Janet Lawrence)