| SIRTE, Libya
SIRTE, Libya Arab states should prepare for the possibility that the Palestinian-Israeli peace process may be a total failure and come up with alternatives, Arab League Secretary-General Amr Moussa said on Saturday.
The troubled peace process suffered a setback this month when the Palestinians said indirect talks with the Israelis would not take place unless Israel canceled a decision to build 1,600 new homes in a settlement near east Jerusalem.
Further underscoring the obstacles to reviving negotiations, two Israeli soldiers and a Palestinian were killed in a clash in the Gaza strip on Friday, the bloodiest fighting in the enclave in 14 months.
Moussa did not say what the alternatives to the peace process might be, but one option is to revive an eight-year-old initiative under which Arab states would normalize ties with the Jewish state in exchange for Israeli concessions on territory.
Speaking to Arab leaders at a summit of the Arab League in the Libyan town of Sirte, Moussa said a fresh approach was needed.
"We have to study the possibility that the peace process will be a complete failure," Moussa said. "It's time to face Israel. We have to have alternative plans because the situation has reached a turning point.
"The peace process has entered a new stage, perhaps the last stage. We have accepted the efforts of mediators. We have accepted an open-ended peace process."
"But that resulted in a loss of time and we did not achieve anything and allowed Israel to practice its policy for 20 years," he said.
U.N. BACKS TALKS
Earlier this month the Arab League gave its blessing to the Palestinians to conduct proximity talks with Israel, and its stance on whether those negotiations should still go ahead could be decisive.
U.N. Secretary-General Ban Ki-moon said on the sidelines of the summit that he had urged Arab leaders to support the proximity talks, despite setbacks on the ground.
"There is no alternative to negotiations on a two-state solution. Without that, we risk sliding into despair and the potential for more violence of the kind we have witnessed recently," he told reporters.
But Palestinian delegates said Israeli actions had, in effect, frozen the talks. There appeared to be no consensus among Arab states at the summit about whether to back the talks or call for them to be put on hold.
The alternative to the stalled peace process which is favored by many states in the region is the Arab Peace Initiative, first proposed by Saudi Arabia at an Arab League summit in Beirut in 2002.
Under that initiative, Arab countries would normalize relations with Israel in return for a complete Israeli withdrawal from occupied territories and a fair settlement for Palestinian refugees.
The Arab League chief also said the 22-member organization should start talking to Tehran to address concerns, especially strong among Iran's neighbors across the Persian Gulf, about its nuclear program.
"I know there is a worry among Arabs regarding Iran but this situation confirms the necessity of a dialogue with Iran," Moussa said in his speech.
Turkish Prime Minister Tayyip Erdogan, whose country's traditionally warm relations with Israel have soured in the past few months, was a guest at the summit and he accepted an offer to form a new regional grouping of Turkey and the Arab League.
(Writing by Christian Lowe; Editing by Michael Roddy)