Netanyahu - AP - April 11, 2011
Prime Minister Benjamin Netanyahu speaks during his meeting with EU ambassadors in Jerusalem, Monday, April 11, 2011. Photo by AP
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Prime Minister Benjamin Netanyahu once again hinted yesterday, during a meeting in Jerusalem with the Spanish crown prince, that if the deadlock in the peace process persists, Israel would take unilateral steps.

Meanwhile, the settler leadership reacted angrily to yesterday's report in Haaretz detailing Netanyahu's plan for a unilateral West Bank withdrawal to counter an impending unilateral Palestinian declaration of statehood.

In the statement, the Yesha council of settlements said Netanyahu was trying to prevent a "diplomatic tsunami" that would ensue following recognition by the United Nations General Assembly in September of a Palestinian state within the 1967 borders.

According to Spanish diplomats, Netanyahu alluded to his planned steps in discussions with Crown Prince Felipe de Bourbon, saying Israel would be very happy to return to the negotiating table, but if the Palestinians do not want to do so, Israel would weigh other options and had various ideas.

Deputy Foreign Minister Danny Ayalon, who was also at the meeting, said "the Palestinian move toward unilateral recognition of statehood at the United Nations General Assembly is an empty threat that does not serve the Palestinian interest."

In a statement of response to yesterday's Haaretz report that the prime minister was mulling a withdrawal of Israel Defense Forces troops from the West Bank and other measures, the Yesha council said: "Instead of behaving with a cool head and reason, Israel is radiating panic," the Yesha council said. According to the council, the Arab world and the international community can sense this panic, leading them to intensify their demands on Israel.

"At a time when southern Israel is being hit by missiles, it is astounding that there are people talking about another withdrawal," the statement also said.

The Yesha council called on Netanyahu to make clear that a unilateral Palestinian move would be answered with a unilateral Israeli move, in the form of extending Israeli sovereignty to the West Bank or parts of it. "That is the right response, not more concessions," the council said.

Meanwhile, ahead of a meeting of the donor countries to the Palestinian Authority today in Brussels, the U.N.'s special coordinator for the Middle East peace process, Robert Serry, published a report stating that the Palestinian Authority had made marked progress in six areas of Palestinian governance that pave the way for a functioning state. Progress had been made, the report stated, in the areas of health, education, water supply, energy, security and justice.

Serry's report is to be presented to the Ad Hoc Liaison Committee, a 12-member panel of the European Union and United States which serves as the principal policy-level coordination mechanism for development assistance to the Palestinians.

Although the report noted recent measures taken by Israel to improve movement and access to the West Bank in a bid to support economic activity in the territory, Serry said this was not enough. The special coordinator called on Israel to "roll back measures of occupation" to match Palestinian achievements.

He also stressed "the urgent need for Israeli-Palestinian peace negotiations on a two-state solution to resume, if the state building and political tracks are to come together by September."

Palestinian Authority Prime Minister Salam Fayyad will also be presenting a document to the committee with facts and figures demonstrating how the Palestinian Authority has used hundreds of millions of dollars in foreign assistance over the past two years to create services, and stating that the Palestinians are ready for statehood now.