Mahmoud Abbas AP August 8, 2010
Palestinian President Mahmoud Abbas speaking at a ceremony in the West Bank city of Ramallah on August 8, 2010. Photo by AP
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Palestinian Authority President Mahmoud Abbas has signaled that a renewal of settlement construction in the West Bank would not necessarily end peace talks, attendees at a dinner with the Palestinians leader in New York told Haaretz on Wednesday.

According to a transcript of the event in New York, the Palestinian president said: "I cannot say I will leave the negotiations, but it's very difficult for me to resume talks if Prime Minister Netanyahu declares that he will continue his activity in the West Bank and Jerusalem."

Abbas has repeatedly threatened to walk away from peace talks, launched this month in Washington, if Israel resumed building in its West Bank settlements after a 10-month moratorium expires on Sunday.

Prime Minister Benjamin Netanyahu has said he will not extend the slowdown, which has put thousands of planned housing starts on hold. Israel has also quietly halted new construction in East Jerusalem, the disputed sector of the city that the Palestinians claim for their future capital.

Speaking to a closed meeting of Jewish American leaders in New York late Tuesday, Abbas made clear that he wanted to continue the dialogue with Israel and signaled that he was backing away from his ultimatum, but he also urged Israel to extend the building restrictions for several months while the sides negotiate the final borders between Israel and a future Palestine.

"Let's demarcate the border now in a short time so that the Israelis can build on their side of the border," he said, adding "at that time, Israelis will be free to build in their territory and the Palestinians the same."

Some 50 leaders of Jewish American organizations as well as former diplomats and policymakers attended the meeting with Abbas, who was in New York for the General Assembly of the United Nations. The two-hour gathering was sponsored by the S. Daniel Abraham Center for Middle East Peace.

Israeli and Palestinian officials have also been meeting with American mediators in hopes of resolving the standoff over the settlements.

The United States, along with the European Union, has urged Israel to extend its settlement slowdown - a move that Netanyahu is resisting because of heavy pressure within his hard-line governing coalition.

At the same time, Washington is pressuring Abbas not to quit the talks just weeks after they got under way at a White House summit.

The settlement issue is one of the thorniest in the peace talks. Some 300,000 Israelis live in settlements dotting the West Bank, in addition to 180,000 Israelis living in Jewish neighborhoods built in east Jerusalem.

The Palestinians say that by gobbling up territory they claim, continued settlement expansion makes it ever more difficult to establish a viable Palestinian state.

It should be mentioned that in his previous meeting with the American Jewish Leaders that took place in May in Washington, Abbas said “I would never deny [the] Jewish right to the land of Israel”.

Meanwhile, Palestinian Prime Minster Salam Fayyad attended a separate meeting with more than 65 American Jewish leaders in New York from business, religious and community sectors.

Speaking to the attendees, Fayyad said violence “has to be dealt out of the equation permanently regardless of what happens in the peace process," and added that Israeli military incursions into territory controlled by the PA weakened his government’s credibility at a time when it was working hard to improve the lives of Palestinians.

Fayyad declined to discuss final status issues such as the Palestinian right of return, but rejected Netanyahu’s demand to station Israeli troops along the eastern border of a future Palestinian state with Jordan as incompatible with true sovereignty.