| RAMALLAH, West Bank
RAMALLAH, West Bank Palestinian leaders put off a decision on Thursday about restarting peace talks with Israel, with most saying Israel must first meet their terms before negotiations can start, a Palestinian official said.
President Mahmoud Abbas had gathered fellow PLO leaders in Ramallah to discuss his meetings with U.S. Secretary of State John Kerry this week. Kerry has extended his stay in the region in the hope that he would achieve a breakthrough in resuming the talks that stalled in 2010.
But no decision emerged, one official who attended Thursday's meeting told Reuters, and Abbas formed a committee to present a formal response to Kerry's peace push on Friday.
"Most PLO officials who attended the meeting described Kerry's offer as not sufficient for resuming negotiations with Israel," said the official, Qais Abdel-Karim.
The main sticking point seemed to be a Palestinian demand that Israel agree to negotiate on condition that the borders of a future Palestinian state would be based on boundaries drawn before a 1967 Arab-Israeli war.
Israeli Prime Minister Benjamin Netanyahu, whose rightist coalition government includes parties that back Jewish settlers on the West Bank and in East Jerusalem, says he wants to start peace talks immediately, but without preconditions.
"There is a general tendency among PLO officials to reject resuming negotiations before Israel recognizes the 1967 borders as a base for the peace process and for it to end settlement activity," said Abdel-Karim.
Kerry has given no details on where he believes the two sides might give ground, though he said after meeting Abbas in Jordan on Wednesday that differences had narrowed "very significantly".
A U.S. State Department official said there were currently no plans to announce a resumption of Israeli-Palestinian talks.
Making his sixth visit to the region since March, Kerry has not spelled out his proposals. But his efforts won the notable endorsement of the Arab League, which said they "provide the ground and a suitable environment to start negotiations".
Kerry has highlighted a 2002 offer made by the 22-nation League to make peace with Israel in return for a Palestinian state broadly inside borders that existed before Israel occupied the West Bank, Gaza Strip and East Jerusalem in 1967.
An Israeli official, briefing anonymously, said Israel had agreed to a new wording on future border negotiations. However, a Netanyahu spokesman denied there had been any change in Israel's position.
The Arab League confirmed this week that it was willing to consider swapping some land on either side of the 1967 borders, bringing it closer to Israel's position. Israel says the old borders are indefensible and that some West Bank settlement blocs should be incorporated into Israel.
Abbas, whose peace strategy is opposed by the Islamist group Hamas which rules the Gaza Strip, has sought Arab League support in the past to engage Israel. It was not clear whether Wednesday's endorsement would give him enough political cover to resume direct talks.
Hamas's leader in Gaza, Ismail Haniyeh, called Kerry's efforts "a waste of time".
Abbas had convened senior members of the umbrella Palestine Liberation Organization (PLO) and his Fatah party in Ramallah, hub of the Israeli-occupied West Bank and seat of his U.S.-backed self-rule administration.
Before Thursday's meeting, Palestinian officials seemed pessimistic. They appeared to allude to reports that Kerry's formula lacked any mention of stopping settlement construction but might include a reference to Palestinian recognition of Israel as a Jewish state - something they never have accepted.
Negotiations, which have ebbed and flowed for two decades, last broke down in late 2010, after a partial settlement halt meant to foster talks ended and Netanyahu refused to extend it.
Palestinians familiar with Abbas' thinking speculated he might now forgo the call for a settlement moratorium given a recent slowdown in housing starts issued by Israel's government, though it may still be painful to roll back his previous demand.
If Abbas yields on the issue, it may be in exchange for a goodwill gesture from Israel such as an amnesty for around 100 veteran PLO fighters long held in its jails.
Israel gave no sign such prisoner releases were in the offing, but major Israeli broadcaster Army Radio said some West Bank roadblocks could be dismantled to ease Palestinian travel.
Shimon Peres, Israel's dovish president, was optimistic about Kerry's mission. "The latest news I have is that the secretary really made real progress and the chances for an understanding heightened. And this day, tomorrow and another day are very crucial. It's touch and go," he told foreign correspondents.
Israel has long insisted it would keep swathes of West Bank settlements under any eventual peace accord. Most world powers deem the settlements illegal and the European Union (EU) announced a plan on Tuesday to bar financial assistance to Israeli organizations operating in the occupied territories.
An Israeli official said Netanyahu has "attacked" the EU plan in conversations with European leaders where he argued that other "burning issues" such as the Syrian civil war and disputed Iranian nuclear program should take precedence.
(Additional reporting by Arshad Mohammed in Amman, Noah Browning in Cairo, Allyn Fisher-Ilan in Jerusalem, and Nidal al-Mughrabi in Gaza; Writing by Dan Williams and Ari Rabinovitch; editing by David Stamp)