The "forum of seven" senior cabinet ministers held their first meeting over the weekend to discuss the continuation of the West Bank settlement freeze, which is due to expire in September, concluding that the issue would be the main hindrance in direct talks with the Palestinians.

The Palestinian Authority has said that it would halt direct negotiations if Israel did not extent the settlement freeze beyond September 26, yet Prime Minister Benjamin Netanyahu recently said that continuing the construction freeze after it expired would be impossible politically and would bring down the coalition.

Most of the ministers in the forum are against extending the freeze, yet Defense Minister Ehud Barak and Deputy Prime Minister Dan Meridor have been pushing for a compromise in line with the previous government's policies, in which the construction will only be renewed in the main settlement blocs, or the freeze would be extended by an additional three months.

The ministers concluded after their meeting that Israel would agree to certain goodwill gestures toward the Palestinians once the talks began.

Palestinian Authority President Mahmoud Abbas has conditioned direct talks with Israel on a continued construction freeze.

Palestinian sources told Haaretz that Abbas seeks unequivocal clarifications from the United States that the framework for direct talks will include a declaration that the Palestinian state will be based on the June 4, 1967 borders and that border adjustments will be based on exchanges of territory.

The PA also wants an Israeli declaration that the construction freeze in the settlements will continue and that construction in East Jerusalem will stop.

The Arab League has laid out its conditions for supporting the direct talks, specifically, that there are clear terms of reference, a definitive time frame to end the conflict and a monitoring unit to ensure conditions are being met.