Middle East envoy George Mitchell is due in Israel on Tuesday to continue talks with Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas aimed at resolving the impasse over the settlement construction freeze.

At a meeting scheduled for Wednesday, Mitchell will discuss with Netanyahu a U.S. compromise proposal. Mitchell is also scheduled to meet with Abbas tomorrow.

U.S. Secretary of State Hillary Clinton spoke with Netanyahu twice on the telephone Monday to discuss the proposal, which would include U.S. guarantees over core issues in the negotiations between Israel and the Palestinians on issues including refugees, security arrangements and Israel's status as a Jewish state. In return for the American guarantees, Israel would extend the suspension of construction in West Bank settlements for several more months. At this stage Netanyahu is believed to be resistant to the offer.

According to an Israeli source who is familiar with the details of the conversations between Clinton and the prime minister, Netanyahu was not impressed by the proposal and did not give a positive response to it.

A European diplomat who has been briefed on the latest developments said Netanyahu has made it clear to U.S. officials that any extension of the freeze will not apply to the large settlement blocs, and that construction on 2,000 residential units for which permits have already been issued will be permitted to continue.

Abbas is demanding a total suspension of construction in the settlements. The Palestinian leader met Monday in Paris with Nicolas Sarkozy.

The French president announced at a joint press conference after their talks that he would ask Abbas, Netanyahu and Egyptian President Hosni Mubarak to peace talks in Paris before the end of October.

Sarkozy called Netanyahu Monday to invite him to the summit, which a senior French diplomat said is being coordinated with Washington.

The French president also urged that Europe be given a greater role in the Middle East peace process. "It is not viable for Europe to contribute money and then be outside the political process," he said. "We don't want to be just spectators," he told journalists.

Sarkozy said that the method of the peace process must be changed and that another "mechanism" be provided to support the negotiations. He was referring to the Union for the Mediterranean, which includes the 27 European Union member states as well as Israel and the Palestinian Authority.

Broader peace participation

Abbas said he was in full agreement with Sarkozy's initiative, saying "the base of participation [in the peace process] must be enlarged."

The Palestinian leader said that any decision to leave the peace talks will not be a hasty one. He added that the final decision would be made on October 4, at the meeting of the Foreign Ministers of the Arab Initiative Monitoring Committee of the Arab League.

"We will not react quickly," Abbas said. "We will study all the consequences with Arab countries, with the Palestinian leadership," he said, and announce the decision after the conference.

Abbas demanded that Israel extend the construction freeze by three or four months.

Abbas spokesman Nabil Abu Rudeina said the PA is under no pressure to return to the negotiations and is waiting for Israeli responses regarding the construction freeze.

Israeli negotiating team head Isaac Molho poke in Washington yesterday with Mitchell and other administration officials, as did his Palestinian counterpart, Saeb Erekat.

Middle East Quartet envoy Tony Blair met with Netanyahu Monday for the second time in the past several days. Blair also met with Defense Minister Ehud Barak.

International pressure is mounting on Israel to extend the construction suspension, which ended on Sunday.

The United States said Monday it was disappointed by Israel's decision not to renew the freeze.

"We are disappointed but we remain focused on our long-term objective and we will be talking to the parties about the implications of the Israeli decision," U.S. State Department spokesman P.J. Crowley told reporters in New York.

The EU foreign policy chief, Catherine Ashton, said she "strongly regrets" Israel's failure to renew its partial freeze on construction in the territories, according to her spokeswoman.

"The position of the EU is very clear: Settlements are illegal under international law, constitute an obstacle to peace and threaten to make a two-state solution impossible," Ashton's spokeswoman, Maja Kocijancic, said.

"We will carefully examine the consequences of this decision and consult with the parties and our Quartet and Arab partners," she added.