Peace talks between Israel and the Palestinians that are set to begin next week in Washington may be scuttled before they even get going. Israel has yet to commit to extending a freeze on construction of settlements that the Palestinian side says it needs to continue negotiations.

That settlement freeze is set to expire Sept. 26.

Palestinian Authority President Mahmoud Abbas stated in a letter to President Obama that he would not participate in the direct talks if Israel continued construction in the West Bank and Jerusalem.

Reading from that letter to reporters on Monday, Palestinian negotiator Saeb Erekat said, "If Israel resumes settlement activities in the Palestinian territories, including East Jerusalem, we cannot continue negotiations."

The direct talks, scheduled to start Sept. 2, will be the first time the two sides have negotiated directly since Israeli military forces launched Operation Cast Lead in December 2008 against Hamas military positions in Gaza.

Over the weekend and on Monday, the Israeli press reported that Prime Minister Benjamin Netanyahu's Cabinet was debating what the construction freeze would include.

A draft attributed to the Israeli intelligence minister, Dan Meridor, is said to limit construction to the settlement blocs in and around Jerusalem that are expected to remain in Israel after a final deal. That draft also would allow for construction in the Jewish-majority neighborhoods, though not in Arab areas of Jerusalem.

The status of Jerusalem, or what the Palestinians call Quds, is one of the most sensitive elements of any peace talks. Israel won the eastern half of the city in the 1967 war with seven Arab nations. Both sides claim the city as their capital. Two Israeli prime ministers, Ehud Barak and Ehud Olmert, have offered during negotiations to divide the city.

The United States, which will be hosting the Sept. 2 talks, has said the issue of the settlement freeze should be handled through the negotiations.

"We are very mindful of the Palestinian position, and once we're now into direct negotiations, we expect that both parties will do everything within their power to create an environment for those negotiations to continue constructively," State Department spokesman P.J. Crowley said Monday.

Earlier this year, Mr. Obama praised the settlement freeze as an unprecedented halt of construction activity in all settlements because it included what is deemed "natural growth," or the building of schools and other facilities to accommodate burgeoning families. The Meridor plan, as reported, would not stop such natural growth for the main block of Jewish settlements around Jerusalem.

The Obama administration has declined to endorse a 2004 letter from President George W. Bush to Prime Minister Ariel Sharon stating that the United States recognized "new realities on the ground, including already existing major Israeli population centers," and that "it is unrealistic to expect that the outcome of final-status negotiations will be a full and complete return to the armistice lines of 1949."

In a separate letter to Mr. Abbas, Mr. Bush said the Palestinian Authority would have to agree to any eventual changes to the 1949 armistice lines.

Nonetheless, the Bush letter in some ways is contrary to the current Arab League position, which says Israel must give back all of the land won during the 1967 war.

Earlier Palestinian-Israeli negotiations, however, have allowed for land swaps of territories to be carved into the final borders between the Jewish and Palestinian states that deviated from the 1949 armistice lines.

A senior Israeli official said in an interview Monday that he expected borders and settlements to be among the first issues discussed in next month's negotiations.

"When we discuss the issue of settlements and borders, we will want to ensure the major settlement blocks remain part of the state of Israel," the official said.

Elliott Abrams, deputy national security adviser under Mr. Bush, who worked closely with Mr. Sharon when he dismantled settlements in Gaza in 2005, said Israel should focus on developing only the settlements it expected to be within its final borders.

"The distinction between settlements Israel is going to keep and settlements beyond the fence is one that is useful now to make," Mr. Abrams said. "It's useful in terms of Israeli politics, because most Israelis believe what is beyond the fence will not be part of Israel. Why should Israel be investing in areas that are not going to be settled by Israelis?"

Hussein Ibish, a senior fellow at the American Task Force on Palestine, said he thought Mr. Abbas would accept a settlement freeze that excluded the main Jewish settlement blocks.

"Abbas, I think, needs assurances that the U.S. really has secured an informal Israeli commitment only to build in the large blocks and Jewish areas of Jerusalem that are generally understood to be likely parts of a land swap, and not to expropriate any more land in the West Bank or push into Palestinian parts of Jerusalem," he said.

Mr. Ibish added: "I think confirmation of that from the U.S. and no comment, but sticking to those guidelines by Israel should be enough to keep him at the table even though the road map is quite clear that all activity, including natural growth, is to stop and the U.S. has expressed a similar view."

Aaron David Miller, who has been a senior Middle East adviser to six secretaries of state, said Mr. Netanyahu, in particular, would need to go further than he has in public on Jerusalem and other issues for the peace talks to be successful this time.

"For the sixth or seventh time in the last 12 years, permanent-status negotiations have started yet again," Mr. Miller said. "As long as expectations are not raised, and the parties own the process, then the administration is right to do this. No one should abandon hope, but we need to abandon illusions."