U.S. sets new Israel meeting, presses Arabs to help

JERUSALEM (Reuters) - U.S. President Barack Obama's envoy will hold a second meeting in a week with Israel's defense minister, an Israeli official said on Friday, announcing talks on Monday likely to focus again on a dispute over settlements.

A senior U.S. official confirmed to Reuters that Washington is asking Arab governments whether they might ease sanctions on Israel if it freezes Jewish settlement on Palestinian territory, a move that could lead to regional peace negotiations.

The U.S. State Department had no immediate comment.

But Arab leaders have so far been cool, Western diplomats said, to suggestions they might open their airspace to Israeli airliners, allow roaming calls by Israeli cellphones or let in tourists whose passports show they have also visited Israel.

Israeli Defense Minister Ehud Barak will meet Obama's Middle East envoy George Mitchell in London on Monday, six days after their meeting in New York on Tuesday, an Israeli official said.

No details on the agenda were immediately available. Israeli Prime Minister Benjamin Netanyahu has, since taking office four months ago, been resisting U.S. pressure to halt expansion of West Bank settlements to unblock peace talks with Palestinians.

After last meeting Mitchell, Barak made a link between a settlement freeze and progress on Arab states "normalizing" relations with Israel, which is isolated by its neighbors.

On Friday, a senior U.S. official told Reuters: "We are trying to get the Arab states, in the context of meaningful action by the Israelis, to take steps toward normalization."

Mitchell aimed to foster negotiations: "To do that, we want all the parties to live up to their obligations," he said -- Israel should halt settlements and Palestinians should do more to curb security threats and incitement against Israel, while Arabs states would make some conciliatory gestures to Israel.

Such moves could be announced simultaneously, he added.

ARAB CONCESSIONS?

Arab gestures could include letting Israeli airliners fly over their territory, saving long detours on flights to Asia, and allowing Israel to open interests sections in other states' embassies in Arab capitals, such as Riyadh and Abu Dhabi.

Also discussed in U.S. overtures to Arab governments that have been supported by other members of the Quartet of mediating powers were ending the blocking of Israeli-registered cellphones on Arab networks and lifting bans on entry to tourists and other visitors whose passports carry Israeli visas or entry stamps.

The U.S. official said Washington was also suggesting direct meetings between senior officials and cultural exchanges:

"The idea has always been to have a set of simultaneous actions that could be (announced) on one day, either through press releases in different capitals or at a meeting ... that the Israelis will announce meaningful action on settlements, the Palestinians will (take meaningful steps) on security, and the Arabs will announce some steps toward peace."

Obama himself last month spoke in favor of a regional peace settlement, that would include not just a deal on a Palestinian state but end decades of confrontation between Israel and states like Saudi Arabia and Syria. Although Israel has made peace with Egypt and Jordan, even those ties are still fairly limited.

There has been little comment from Arab governments and Western diplomats doubt the sort of temporary halt to new Jewish building projects in the West Bank that Israel has spoken of would be enough to persuade Arab states to make concessions.

"The Arabs ... are saying they don't want to pay for something twice," the diplomat added, noting the standing Arab position that Israel had already committed under the 2003 "road map" peace plan to freezing all its settlement activity.

"It would be hard for them to give up something when building work was still continuing on existing settlement projects," he added, ruling out a quick breakthrough of the kind that brought Egypt's President Anwar Sadat to Israel in 1977.

"The Saudis are obviously very cautious. They're not going to have a Sadat moment, at least not in the foreseeable future."

(Additional reporting by Arshad Mohammed in Washington and Adam Entous and Ori Lewis in Jerusalem, writing by Alastair Macdonald; Editing by Richard Balmforth)