JERUSALEM � Hopes of averting a breakdown in Middle East peace talks grew Thursday as senior Palestinian officials said their side would consider an expected U.S.-brokered compromise on Israeli settlement-building in the West Bank.
At issue is the 10-month-old Israeli slowdown on settlement building � a near-halt to new projects aimed at coaxing the Palestinians into talks with the government of Prime Minister Benjamin Netanyahu.
The restrictions expire Sunday, only weeks after U.S.-sponsored talks were finally launched amid much fanfare. As the deadline looms the region has grown increasingly tense, fearing not only a collapse of the brittle peace effort but perhaps a return to violence as well � fears stoked by a bout of Palestinian rioting Wednesday near key Jerusalem holy sites.
The so-called settlement "moratorium" is far from a freeze on building, because thousands of housing units whose construction preceded November 2009 were allowed to continue under its self-declared terms. But with several notable exceptions, new projects were not launched. The Palestinians want this extended, and the United States publicly backs the demand.
In a speech to fellow world leaders at the U.N. General Assembly Thursday, President Barack Obama called for an extension and said restrictions have "made a difference on the ground, and improved the atmosphere for talks."
State Department spokesman P.J Crowley said in a conference call with reporters that the United States is offering suggestions to the Israelis and Palestinians on how to overcome the settlements issue.
"There is significant back and forth going on," he said.
Netanyahu has refused � at least in part because key nationalist coalition partners are likely to rebel if he gives in.
Danny Danon, a deputy speaker of Israel's parliament, said he will lead a rally with other hawkish lawmakers from Netanyahu's Likud party Sunday in the West Bank settlement of Revava.
"We have decided that the best way to end the freeze is to begin building," he said in a statement. "Cement trucks, bulldozers and other earth moving equipment are already in place in Revava and the activists plan on marking the last hours of the freeze by laying the foundations for a new neighborhood."
But Netanyahu has signaled a willingness to seek a way out of the impasse, saying earlier this month that the current restrictions on settlements will not remain in place, though there will still be some limits on construction.
Some in Israel have proposed a compromise � for example, that building might resume in some places but not return to the relatively unfettered construction that prevailed before the restrictions were imposed last year, under heavy U.S. pressure.
Palestinian President Mahmoud Abbas himself appeared to back away from the extension demand in comments late Tuesday to prominent American Jewish figures. "I cannot say I will leave the negotiations, but it's very difficult for me to resume talks if Prime Minister Netanyahu declares that he will continue his (settlement) activity in the West Bank and Jerusalem," he said, according to a transcript of the event obtained by The Associated Press.
The Palestinian ambassador to the United Nations later said the comments had been misconstrued, but did not deny them outright.
On Thursday, two senior Palestinian officials told the AP that Obama's special Middle East peace envoy George Mitchell was indeed leading a mediation effort, speaking directly with Netanyahu and Abbas.
The officials, who are close to the negotiations, said the Palestinians are willing to show "some flexibility" on the issue. Both spoke on condition of anonymity because they are not authorized to speak to the media.
They said one proposal being considered was that Israel would resume building new projects only in some areas, probably in communities close to the Israeli border and likely to be retained by Israel in a future deal as part of a land swap. That idea has been floated by Israel's relatively moderate deputy premier, Dan Meridor.
But the officials added that at least two other scenarios were also under discussion, including a three-month extension of the moratorium or a conditional extension in which he Palestinians would agree to the "exceptions," in effect legitimizing the building of several hundred new homes beyond those that were under construction 10 months ago.
The officials did not say who first raised which proposal but said that all three had been discussed with Mitchell, and that the Palestinians were waiting for the U.S. envoy to get back to them after discussing the ideas with Netanyahu.
U.S. and Israeli officials would not confirm the details of the talks.
The fact that the first month of the negotiations was bogged down over the moratorium underscores how ambitious is Obama's one-year timeline for reaching a comprehensive resolution to the century-long conflict � establishing a Palestinian state on lands occupied by Israel in the 1967 war.
Netanyahu, in a departure from previous hardline positions, accepted the idea of a Palestinian state last year. But there is overwhelming skepticism among both Israelis and Palestinians about his ability to actually agree with Abbas on terms.
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Daraghmeh reported from Ramallah, West Bank. Matthew Lee contributed from New York.
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