Israel not counting on Obama in peace talks: Livni

By Claudia Parsons

NEW YORK (Reuters) - Israel's chief negotiator with the Palestinians said on Thursday Israel did not need any "dramatic" intervention in the peace process from U.S. President-elect Barack Obama when he takes office in January.

Israeli Foreign Minister Tzipi Livni, who could become prime minister after Israel's general election in February, told Jewish leaders in New York the international community should limit itself to backing the talks according to parameters set out at a peace conference in Annapolis, Maryland, nearly a year ago.

The talks have been hobbled by violence and bitter disputes over Jewish settlement building and the future of Jerusalem.

Livni said she welcomed the outcome of a meeting she attended last weekend in Sharm el-Sheikh, Egypt, with the Quartet -- the European Union, Russia, the United Nations and the United States -- and Arab and Palestinian leaders.

Livni said she had told them: "We don't ask you to intervene. Please, this is bilateral. We don't want you to try to bridge gaps between us. Don't put new ideas on the table."

"We know what we are doing, we are responsible enough. We need your help just in supporting the process according to the parameters and the provisions we all set between us."

Always remote, the chances of a peace deal this year appeared to evaporate entirely when Israeli Prime Minister Ehud Olmert announced his decision to resign because of a corruption scandal, triggering plans for a February 10 election in Israel.

"SITUATION IS CALM"

As leader of the Kadima party, Livni was unable to form a coalition government last month, but she could become prime minister after the election. She said Obama's top priority would be to address the financial crisis in the United States.

She said that while there were expectations from Obama on the Middle East, her message to the new administration was: "You don't need now to do nothing dramatic about it. The situation is calm. We have these peace talks."

Addressing a meeting of the UJA-Federation of New York, she said the United States was a friend but that Israel was "not a state that puts its problem on the American table the day after the new administration" takes office.

It is unclear how much emphasis Obama will place on the Israeli-Palestinian peace process and Palestinian officials have repeatedly said they are worried Israel would use any lull in talks to expand Jewish settlements in East Jerusalem and the West Bank, lands seized by Israel in a 1967 war.

Livni said the only way for Israel to live as a democratic Jewish state in peace and security was to give up some of its land for a Palestinian state, in return for Palestinians dropping their insistence on the right of return of refugees.

Some 700,000 people, half the Arab population of Palestine in May 1948, fled or were driven from their homes when Israel was created. Refugees and their descendants now number 4.5 million, with the largest refugee communities in Jordan, Syria and Lebanon, as well as the West Bank and Gaza Strip.

Livni said the answer to the refugee issue was not to allow a return to Israel, "not even to one of them."