Israel offers to limit settlement building as peace offering

JERUSALEM - The Israeli Cabinet has approved a restriction of West Bank settlement construction for 10 months in what Prime Minister Benjamin Netanyahu says is a bid to show the world Israel wants peace with the Palestinians.

However, the plan for curbs does not include a freezing of settlement construction in the occupied East Jerusalem area that Palestinians envision as their future capital.

Palestinians dismissed the plan even before it was formally unveiled, as a repetition of previously unacceptable positions.

"Any offer not including East Jerusalem will be rejected immediately," said Nabil Abu Rudeineh, spokesman for President Mahmoud Abbas. "No Palestinian, no Arab can cross this line."

The plan also does not apply to housing units already under construction. Nevertheless, Israeli officials termed it "the furthest any Israeli Government has gone to restrict settlement building".

No new private construction is to be approved for 10 months and, with the exception of 25 planned buildings, no construction already approved but not started will be launched, officials said.

There were conflicting reports of whether the restrictions applied to "natural growth" - a phrase Israel uses to describe building more housing to accommodate growing families.

Even though the plan clearly does not comply with the 2003 international roadmap - which calls for a total freeze including in East Jerusalem - US officials are backing Israel's move.

They said the Obama Administration was "hopeful this will lead to a resumption" of peace negotiations.

That leaves Abbas in an even tighter bind, having staked his credibility on a vow not to return to the table unless there is a total freeze, as was originally advocated by Washington. Abbas said this month he is inclined to not seek re-election.

Netanyahu was quoted as telling his Cabinet the plan "allows us to present the world with a simple truth: the Israeli Government wants to enter negotiations with the Palestinians, is taking steps to enter negotiations and is very serious about its intentions to promote peace".

Meanwhile, signs emerged of difficulties in the negotiations between Israel and Hamas about swapping captured Israeli soldier Gilad Shalit for Palestinian prisoners. Hamas leader Khalil al-Haya told a website "Israel has not yet responded to the demands" of the factions over specific prisoners Hamas wants freed.

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