Palestinians reject any Israel-U.S. settlement deal

By Ali Sawafta

RAMALLAH, West Bank (Reuters) - Palestinians reject any deal between Israel and the United States that would allow even limited Jewish settlement construction in the occupied West Bank, a top Palestinian negotiator said Sunday.

"There are no middle-ground solutions for the settlement issue: either settlement activity stops or it doesn't stop," Saeb Erekat told Voice of Palestine radio.

Erekat said Palestinian President Mahmoud Abbas expressed that message in a letter Saturday to U.S. President Barack Obama.

Erekat was responding to reports Israel and the United States were discussing a compromise that would allow some building in existing settlements under what Israel terms "natural growth" to accommodate expanding families.

A U.S. official denied Wednesday a report in the Israeli daily Maariv that the Obama administration agreed work could continue on 2,500 housing units whose construction had begun, despite its call for a total freeze to spur peace efforts.

The report followed talks in London last week between George Mitchell, Obama's special Middle East envoy, and Israeli Defense Minister Ehud Barak aimed at healing a rift over continued settlement activity.

The U.S. State Department said Mitchell was expected in the region "soon" for talks with Israeli and Palestinian officials.