Israel mulls gestures to Palestinians after U.S. trip

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JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu planned to convene his inner cabinet to discuss gestures toward the Palestinians after saying on Thursday progress had been made during a troubled U.S. visit.

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“We think we have found a golden way that would allow the Americans to move the peace process forward while preserving our national interests,” Netanyahu said en route from Washington, where a two-week-old spat over settlements clouded talks.

Despite his hints at compromise, the Palestinians said they had no indication from U.S. President Barack Obama there had been agreement on how to revive negotiations while Israel continues building on occupied land they want for state.

Netanyahu’s cabinet secretary Zvi Hauser said he would assemble top ministers — most of them right-wingers, like the premier — to consider a package of goodwill gestures drawn up by his and Obama’s advisers in a flurry of White House meetings.

The cabinet session had originally been scheduled for Thursday night but an Israeli official said it had been postponed, most likely to Friday afternoon. Netanyahu’s aides offered no details on what would be discussed.

Palestinians want a complete Israeli settlement freeze in East Jerusalem and the rest of the West Bank. Israel regards all of Jerusalem as its capital, a claim that has not won international recognition.

“There is absolutely nothing new, as of this moment, regarding the situation facing the peace process,” Nabil Abu Rdainah, an aide to Palestinian President Mahmoud Abbas, told Reuters. He said Abbas would brief the Arab League, which meets in Libya on March 27-28, about the situation.

The Obama administration and Netanyahu government have tried to get relations back on track after a plan to build 1,600 homes for Jews in Ramat Shlomo, a settlement on West Bank land that Israel annexed to Jerusalem after the 1967 war, was announced on March 10 during a visit by U.S. Vice President Joe Biden.

CONFIDENCE

U.S. officials sought to coax Israel into suspending further East Jerusalem projects and discussing core issues such as borders and the status of Jerusalem as part of indirect talks with the Palestinians that have been blessed by the Arab League.

Obama’s spokesman Robert Gibbs said he had “asked the prime minister to take steps to build confidence for proximity talks so that progress can be made toward comprehensive peace.”

“I think we’re making progress on important issues. But nothing more on substance to report than that,” Gibbs said on Thursday.

Headlines in Israel’s two largest newspapers, Yedioth Ahronoth and Maariv, said Netanyahu’s “back was to the wall” and Israel was in a rare confrontation with its top ally.

“A worsening of the crisis with the U.S.,” said a headline in Haaretz daily.

Gibbs said U.S. officials wanted clarification about any further building in Jerusalem, after a city official on Wednesday said final approval had been given to develop a neighborhood from which Palestinians were evicted last year.

Officials, including U.S. Middle East envoy George Mitchell, held talks in Netanyahu’s Washington hotel as this news threatened to cause further strains between the allies.

The project calls for 20 units to be built at the site of the defunct Shepherd Hotel in the Sheikh Jarrah neighborhood, where a U.S. millionaire has been buying property for settlers.

The European Union issued a statement saying it “condemns the recent decision of the Israeli authorities to authorize construction around the Shepherd Hotel in East Jerusalem.”

“The international community is making every effort to facilitate the resumption of peace talks. Settlement construction in East Jerusalem is illegal and undermines these efforts,” it said.

(Writing by Dan Williams and Douglas Hamilton; additional reporting by Allyn Fisher-Ilan in Jerusalem and Mohammed Assadi in Ramallah; editing by Andrew Roche)

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