Abbas hints at settlement compromise

The Palestinian president has left the door open to continuing peace negotiations with Israel even if it resumes settlement construction in the West Bank, offering a glimmer of hope that a compromise will be reached in a key dispute that has threatened to torpedo the newly relaunched talks.

But in a reminder of the fragile negotiating climate, an Israeli security guard shot and killed a Palestinian man in a volatile east Jerusalem neighborhood early Wednesday, sparking a small riot in the area. Police were trying to contain the violence.

Palestinian President Mahmoud Abbas has repeatedly threatened to walk away from peace talks, launched this month in Washington, if Israel resumes building in its West Bank settlements after a 10-month moratorium expires on Sunday.

Israeli Prime Minister Benjamin Netanyahu has said he will not extend the slowdown, which has put thousands of planned housing starts on hold. Israel has also quietly halted new construction in east Jerusalem, the disputed sector of the city that the Palestinians claim for their future capital.

Speaking to a closed meeting of Jewish American leaders in New York late Tuesday, Abbas made clear that he wants to continue the dialogue with Israel and signaled that he was backing away from his ultimatum.

"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 activity in the West Bank and Jerusalem," Abbas said, according to a transcript of the event obtained by The Associated Press.

Flashpoint of fighting

Abbas urged Israel to extend the building restrictions for several months while the sides negotiate the final borders between Israel and a future Palestine. "At that time, Israelis will be free to build in their territory and the Palestinians the same," he said.

Some 50 leaders of Jewish American organizations as well as former diplomats and policymakers attended Tuesday night's meeting with Abbas, who is in New York for the General Assembly of the United Nations. The two-hour gathering was sponsored by the S. Daniel Abraham Center for Middle East Peace.

Israeli and Palestinian officials have also been meeting with American mediators in hopes of resolving the standoff over the settlements.

The US, along with the European Union, has urged Israel to extend its settlement slowdown - a move that Netanyahu is resisting because of heavy pressure within his hardline governing coalition.

At the same time, Washington is pressuring Abbas not to quit the talks just weeks after they got under way at a White House summit.

The settlement issue is one of the thorniest in the peace talks. Some 300,000 Israelis live in settlements dotting the West Bank, in addition to 180,000 Israelis living in Jewish neighborhoods built in east Jerusalem.

The Palestinians say that by gobbling up territory they claim, continued settlement expansion makes it ever more difficult to establish a viable Palestinian state.

The Palestinians want all of the West Bank as part of their future state, with east Jerusalem as their capital. Israel captured both areas in the 1967 Mideast war. It subsequently annexed east Jerusalem, home to sensitive Jewish, Muslim and Christian holy sites, though the annexation is not internationally recognized.

The conflicting claims to east Jerusalem has been the most explosive issue in two decades of on-again, off-again peace talks. The area is a frequent flashpoint of fighting.

In Wednesday's violence, Israeli police said the security guard opened fire after he was pelted with stones thrown by Palestinian protesters in the Silwan neighborhood. The dead man was identified as a 32-year-old Palestinian resident with a criminal record.

After the shooting, a crowd of protesters hurled more stones at the police, who responded with tear gas.

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