U.S. envoy meets Netanyahu over settlement freeze

By Ori Lewis

JERUSALEM (Reuters) – U.S. Middle East envoy George Mitchell began talks on Tuesday with Prime Minister Benjamin Netanyahu, facing resistance from the Israeli leader to a settlement freeze sought by Washington and the Palestinians.

Mitchell, who arrived in Israel on Saturday, has been trying to prepare a package under which Israel would halt construction in settlements in the occupied West Bank and Arab nations would take initial steps toward recognizing Israel.

"We hope to bring this phase of our discussions to early conclusion and to move forward in our common search for a comprehensive peace in the region," Mitchell told reporters at the start of the meeting, indicating he hoped to wrap up a deal.

Washington hopes to arrange a three-way meeting involving U.S. President Barack Obama, Palestinian President Mahmoud Abbas and Netanyahu at the U.N. General Assembly in New York next week.

Those talks could depend on the outcome of Mitchell's meeting with Netanyahu in Jerusalem and later in the day with Abbas in the West Bank city of Ramallah.

Defying Obama, Netanyahu said on Monday that Israel would not halt all building in West Bank settlements as demanded by Washington but could limit its scope to help to restart peace talks with the Palestinians.

But Abbas has said he would not return to negotiations suspended since December until Israel froze all settlement activity in line with a 2003 peace "road map."

Last week, Israeli Defense Minister Ehud Barak drew a U.S. rebuke by approving 455 building permits in settlements in the West Bank, land Israel captured from Jordan in a 1967 war and which Palestinians want as part of a future state.

The move was widely seen in Israel as a bid to placate settlers before any deal with Washington on construction limitations.

But Israel also has made clear it would continue constructing 2,500 settler homes already being built and that any restrictions would not include Jewish housing in East Jerusalem, which it also captured in the fighting 42 years ago.

Some 500,000 Israelis live in the West Bank and in Arab East Jerusalem, also captured in 1967, alongside some three million Palestinians. The World Court calls the settlements illegal and Palestinians say the enclaves could deny them a viable state.