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FACTBOX: Factors to watch from Israel, Palestinians

(Reuters) - Secretary of State Hillary Clinton has rejected the Palestinian position that a resumption of peace talks with Israel must be conditional on a cessation of settlement expansion in the occupied West Bank.

Here is the state of play on key issues affecting Israel and the Palestinians following Clinton’s talks with leaders from both sides on Saturday and the factors to watch in the coming weeks:

Abbas spokesman Nabil Abu Rdainah, speaking from Abu Dhabi where Abbas met Clinton earlier on Saturday, said there could be no change in the Palestinian position.

Israel has shown no sign of budging from its refusal to halt all construction in settlements and Israeli government officials have said peace talks are unlikely to get under way soon.

Israeli officials have voiced doubt Abbas could compromise on the settlement issue in the run-up to parliamentary and presidential elections the Fatah party leader has called for January 24 over the objections of rival Hamas Islamists who run the Gaza Strip.

Even if some formula on settlements could be found, Abbas has made clear Israel must honor agreements on borders and Jerusalem that he said its previous government made in talks in 2008. Israel has rejected that demand.

As President Barack Obama’s peace quest flounders, watch for any sign from Washington that it might consider indirect talks as an alternative to bilateral Israeli-Palestinian negotiations.

Obama is due to address an American Jewish conference in Washington next week. Israeli Prime Minister Benjamin Netanyahu also plans to attend the event and hold talks with the U.S. leader.

The rift between Fatah and Hamas, shunned by Israel and the West, is an additional obstacle to achieving the Palestinian goal of statehood.

Abbas angered Hamas by setting an election date after the Islamist group pulled back from signing an Egyptian-mediated reconciliation pact. Hamas has told Palestinians in the Gaza Strip to shun the ballot.

Tensions have also risen in Jerusalem, where Israeli police and Palestinians clashed on Sunday at al-Aqsa mosque compound, the holy city’s most serious site.

The unrest, which followed a similar incident a month ago, did not appear to herald any immediate slide into widespread violence that could disrupt U.S. peace efforts.

But it was reminiscent of the opening days of a Palestinian uprising that erupted in 2000 after Israel’s then opposition leader Ariel Sharon visited the Jerusalem holy site.

Writing by Jeffrey Heller, editing by Tim Pearce