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Netanyahu fears peace talks delay in settlement feud

WASHINGTON (Reuters) - Israeli Prime Minister Benjamin Netanyahu said on Tuesday he feared Middle East peace talks could be delayed for another year unless Palestinians drop their demand for a full freeze on housing settlements.

Palestinian officials said it was Netanyahu’s policy that was keeping the peace process in limbo.

“We must not be trapped by an illogical and unreasonable demand,” Netanyahu said during a meeting with U.S. House of Representatives Speaker Nancy Pelosi and other congressional leaders, according to his spokesman.

“It could put the peace negotiations on hold for another year,” he said about talks that have been suspended since December 2008.

Netanyahu went to Capitol Hill, a bastion of support for Israel from both sides of the political aisle, before a White House meeting later in the day with President Barack Obama to try to repair relations frayed by the settlements issue.

The Palestinians retreated from their agreement to begin indirect, U.S.-mediated peace talks two weeks ago after Israel announced plans to build 1,600 homes for Jews in an area of the occupied West Bank annexed to Jerusalem.

“We in Congress stand by Israel, something (on which) we have a joint bipartisan commitment,” Pelosi, making no mention of settlements, told reporters.

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Despite a promise from Netanyahu of confidence-building steps -- which have not been disclosed publicly -- to encourage Palestinians to return to talks, the White House was keeping his meeting with Obama low-key, with no public statements expected.

The new housing project, announced during a visit to Israel by U.S. Vice President Joe Biden, touched off the most serious spat with Washington since Obama took office last year.

Israel captured East Jerusalem, along with the West Bank, in a 1967 war and regards all of Jerusalem as its capital. The Palestinians want East Jerusalem as the capital of a state they hope to establish in the West Bank and Gaza Strip.

The release of Netanyahu’s comments before the White House meeting appeared to be a signal to the Obama administration that further vocal criticism of Israeli settlements in and around Jerusalem would only encourage the Palestinians to stay away from talks.

OBSTRUCTION

“Netanyahu’s policy is the one that is obstructing the return to negotiations,” Nabil Abu Rdainah, a senior aide to Palestinian President Mahmoud Abbas, told Reuters in the West Bank city of Ramallah.

Israeli Prime Minister Benjamin Netanyahu is greeted as he takes the stage to address the gala banquet of the American Israel Public Affairs Committee (AIPAC) annual policy conference in Washington, March 22, 2010. REUTERS/Jonathan Ernst

“We are ready to go back to negotiations if Netanyahu adheres to what came in the statement of the Quartet.”

At a meeting in Moscow on Friday, the Quartet of mediators -- the United States, the European Union, Russia and the United Nations -- called on Israel to freeze settlement activity in line with a 2003 peace “road map.”

That plan also obliged the Palestinians to take action to disarm militants.

Netanyahu began a three-day visit to Washington on Monday, delivering a defiant address to the influential pro-Israel lobby AIPAC in which he declared “Jerusalem is not a settlement.”

Pointing to what he has described as a national consensus in Israel over its claim to all of Jerusalem, Netanyahu told AIPAC all Israeli governments have carried out construction in what he called the city’s “Jewish neighborhoods” since 1967.

“Everyone knows, everyone -- Americans, Europeans, Israelis certainly, Palestinians -- everyone knows that these neighborhoods will be part of Israel in any peace settlement,” he said.

Writing by Jeffrey Heller, Editing by John O’Callaghan

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