- Associated Press - Sunday, September 12, 2010

JERUSALEM | Israeli Prime Minister Benjamin Netanyahu said Sunday the current restrictions on West Bank settlements will not remain in place, though there will still be some limits on construction.

Israel’s 10-month freeze on new housing starts in West Bank settlements expires at the end of this month and is a key point of contention in newly launched peace talks with the Palestinians. Palestinian Authority President Mahmoud Abbas has threatened repeatedly to quit the talks if Israel does not renew the restrictions.

Mr. Netanyahu told Mideast envoy Tony Blair, “The Palestinians demand that after Sept. 26, there will be zero building” in the West Bank.

“That will not happen,” Mr. Netanyahu said. Israel will not build “tens of thousands of housing units that are in the pipeline, but we will not freeze the lives of the residents.”

He did not provide details or timelines, but his statement means the ban on new housing starts would be at least partially lifted.

The prime minister imposed a 10-month settlement slowdown in the West Bank to promote the resumption of peace talks. But several thousand housing units already being built were allowed to continue, and the measure does not apply to Jewish neighborhoods in East Jerusalem. Even so, there has been a de facto halt to new construction there as well.

Over the weekend, President Obama urged Mr. Netanyahu to keep the slowdown in place.

Members of Mr. Netanyahu’s Likud Party and government coalition partners oppose extending the restrictions on housing starts.

Mr. Blair’s office would not immediately comment about the details of his meeting with Mr. Netanyahu.

Palestinians repeated their threats to leave the talks after Mr. Netanyahu’s announcement.

“Our position is very clear,” said spokesman Husam Zomlot. “Should the settlement construction and expansion continue, we are out.”

Negotiator Nabil Shaath rejected one possible scenario — that Israel would halt construction in outlying settlements but allow building in settlement blocks closer to the Israel-West Bank line. Mr. Shaath said this would appear to give Israel the right to decide which settlements it will keep.

Palestinians want a state in the West Bank, Gaza Strip and East Jerusalem. They have expressed willingness to trade West Bank territory with Israel in exchange for Israeli land to allow some settlements to remain within Israeli borders after a peace deal, but no detailed agreement has been reached.

Mr. Netanyahu also told Mr. Blair the Palestinians must recognize Israel as a Jewish state, but he would not make that a condition for continuing the negotiations.

“I’m not saying that if this doesn’t happen, I will get up and leave the peace talks,” he said.

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