Israel and Palestinians launch peace talks in discord

By Adam Entous and Wafa Amr

JERUSALEM (Reuters) - The first peace talks in seven years between Israel and the Palestinians opened in discord on Wednesday with the Palestinians demanding a halt to settlement building and Israel calling for a crackdown on militants.

The tensions, coming just two weeks after a U.S.-sponsored peace conference in Annapolis, Maryland, highlighted the difficulties ahead for negotiators trying to reach agreement on a Palestinian state before U.S. President George W. Bush leaves office in January 2009.

Wednesday's negotiating session was supposed to lay the ground for detailed talks on final-status issues, including borders and the future of Jerusalem and Palestinian refugees.

Instead, the first round was dominated by Palestinian demands Israel halt plans to build new houses on occupied land near Jerusalem and concerns about Israeli military activity in the Hamas-controlled Gaza Strip, officials on both sides said.

The Palestinians said future negotiating sessions depended on Israel's response on the settlement issue, but they stopped short of threatening to pull out of the talks.

"We want to hear a reply to our demands," said chief negotiator Ahmed Qurie.

Israeli Prime Minister Ehud Olmert's spokesman, Mark Regev, said both sides raised concerns during the 90-minute session. "This process does not have a quick fix," he said. "It's clear the issues on the table will demand ongoing diplomatic efforts."

The United States, which pushed for the talks, said it was important not to make snap judgments after one meeting.