Settlement dispute stalls Israeli-Palestinian talks

By Adam Entous

JERUSALEM (Reuters) - Israel is considering easing criteria for freeing Palestinian prisoners, a move one Israeli official said on Monday could pave the way for the release of Palestinian leader Marwan Barghouthi.

Israel's deputy defense minister, Matan Vilnai, said Barghouthi, a Palestinian uprising leader from Fatah and a possible successor to President Mahmoud Abbas, could be a candidate for release.

Also on Monday, a second round of peace talks between Israeli and Palestinian negotiating teams were bogged down in a dispute over settlement building near Jerusalem.

Palestinian negotiator Saeb Erekat said the U.S.-backed negotiations, the first in seven years, were "very difficult" because of Israel's refusal to commit to halting all settlement activity as called for under the long-stalled "road map" peace plan.

"This is illegal," Erekat told the Israelis.

Israeli negotiators said the road map calls on the Palestinians to rein in militants in the occupied West Bank and Hamas-controlled Gaza Strip as a condition for establishing a Palestinian state.

Israeli Prime Minister Ehud Olmert and Abbas will meet later this week to try to salvage talks launched at a peace conference in Annapolis, Maryland last month. They set the goal of reaching a statehood deal before U.S. President George W. Bush leaves office in January 2009.

Bush will visit the region early next month.