U.S. sounds out Arabs on Israel gestures: diplomats

By Adam Entous and Alastair Macdonald

JERUSALEM (Reuters) - The United States and its Western allies are sounding out Arab governments to see if they might ease sanctions on Israel if it stopped building Jewish settlements on Palestinian territory, diplomats said on Friday.

As Washington presses Israel's new government on settlements in order to unblock peace talks with the Palestinians, Israeli officials are looking for benefits to show their own voters, and easing Israel's isolation within the region could fit that bill.

But Arab leaders have so far been cool, Western diplomats said, to suggestions they might open their airspace to Israeli airliners, allow roaming calls by Israeli cellphones or let in tourists whose passports show they have also visited Israel.

"The Arabs are being very cautious," one diplomat said of discussions which several Western diplomatic sources were a result of discreet approaches by U.S. envoy George Mitchell and officials from the three other members of the Quartet of mediators -- the European Union, United Nations and Russia.

"The Arabs ... are saying they don't want to pay for something twice," the diplomat added, noting the standing Arab position that Israel had already committed under the 2003 "road map" peace plan to freezing all its settlement activity.

Another diplomat said there had been Quartet discussions on seeking commitments from Arab states to take steps on normalization -- if Israel were to meet demands on settlements.

Israeli Defense Minister Ehud Barak, after a meeting with Mitchell this week, made a link between U.S. efforts to persuade Prime Minister Benjamin Netanyahu to defy right-wing coalition allies and freeze settlement, and progress in talks with Arab states on "normalizing" relations with Israel.

Barak will fly to London on Sunday for further talks with Mitchell on Monday, an Israeli official said on Friday.

U.S. President Barack Obama has also spoken in favor of a regional peace settlement, that would include not just a deal on a Palestinian state but also an end to decades of confrontation between Israel and states like Saudi Arabia and Syria.

Although Israel has made peace with Egypt and Jordan, those ties are fairly limited, and Israel sees economic benefits from regional trade.

PROPOSED CONCESSIONS

Earlier this week, Western diplomats told Reuters that Washington was suggesting to the Arab states that they allow Israeli airliners to fly over their territory, a move that could save El Al and others long detours on flights to Asia, and let Israel open interests sections in other countries' embassies in Arab capitals such as Riyadh and Abu Dhabi.

On Friday, diplomats listed other possible Arab concessions to Israel aimed at promoting business and tourism. They include ending the blocking of Israeli-registered cellphones on Arab networks and lifting bans on the entry of tourists and business visitors whose passports carry Israeli visas or entry stamps.

Diplomats said U.S. negotiators had been hoping to secure first an Israeli settlement freeze that would meet Palestinian President Mahmoud Abbas's conditions for resuming negotiations, then gestures by Arab states to ease Israel's isolation in the region, and finally the launch of a regional peace process.

But Washington faces an uphill task in getting the various parties to set that sequence in motion, they said.