Only two days are left before the end of a 10-month moratorium on new settlement construction in the West Bank, and the Israelis and Palestinians have yet to reach a compromise which would allow the peace talks to continue.

The American administration is leading hectic efforts to come up with a creative solution, as representatives of Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas continue the talks in Washington. US President Barack Obama on Thursday called on Israel once again to continue the building freeze.

Prime Minister Netanyahu has discussed the issue with foreign leaders in the past few days and has extended the stay of his special emissary to the negotiations, Attorney Yitzhak Molcho, in Washington.
The leaders Netanyahu spoke to include US Vice President Joe Biden, US Secretary of State Hillary Clinton, German Chancellor Angela Merkel and Greek Prime Minister George Papandreou.Israeli sources, referring to the American bridging efforts in terms of the settlement freeze issue, clarified Thursday that "a solution has yet to be found which does not deviate from the Israeli government's known policy on this matter."

Palestinian President Abbas hinted Tuesday during talks with Jewish leaders in New York that he would not quit the talks if the settlement construction was resumed. Palestinian Authority officials have said in recent days that they would have to accept a resumption of the construction, and perhaps even a statement from Netanyahu about the end of the freeze.

Meanwhile, the negotiation teams headed by Molcho and Saeb Erekat are attempting to come up with a formula which would prevent a political embarrassment for both sides. One of the options discussed is limited construction in the large settlement blocs only, without a public announcement.

Another option is that Israel will not declare that it is resuming construction, but will not be forced to announce that the freeze will continue either.

"The facts on the ground will prove that there is no serious construction and it will focus on the large blocs," a Palestinian source told Ynet.

Hamas: Abbas selling Palestinians

Officials in Ramallah have confirmed that the American efforts and the administration's desire for a peace process are much stronger than the Palestinians' intention to quit the talks on the backdrop of Netanyahu's refusal to continue the freeze.

"The Americans have clarified that the negotiations must continue under any condition, and this is the reason they weren't halted following the attacks, the killing of a senior Hamas man in Tulkarem, the events in Jerusalem or the strikes in Gaza," one of the sources said.

The opposition to Abbas is expected to speak out in light of this situation. The different organizations comprising the Palestinian Liberation Organization are demanding that the PA quit the talks. Hamas claims that Abbas has proved he plans to sell the Palestinian interest with a declaration that the negotiations will continue even if the building freeze ends.

Netanyahu, on his part, is sticking to the line he has been leading in recent weeks. "Unfortunately, the Palestinians wasted the unprecedented gesture of the freeze, and entered the talks only three weeks ago following American pressure," he said Thursday.

"If the Palestinians want peace, they will stay in the talks with us in order to reach a framework agreement within a year. They held peace talks with the different Israeli government for 17 years while Israel was building in Judea and Samaria, including in the last year of the Olmert government."

The Prime Minister's Office is satisfied with the support for Netanyahu's approach among members of the American Senate, after 52 senators signed a petition backing the Israeli stance that the Palestinians must remain in the negotiations regardless of the settlement freeze dispute.

Meanwhile, the Palestinian prime minister called on Israel to ease restrictions on the West Bank and Gaza Strip as a goodwill gesture on the backdrop of the negotiations.

"Part of what should happen soon, if not ending the occupation itself, is showing signs that it is about to end," Salam Fayyad said Thursday during a speech in Washington.