Middle East peace talks in jeopardy

London: The future of the Middle East direct peace talks appeared to be in jeopardy after Israel refused to extend a ban on West Bank settlements, a media report said.

US officials made frantic attempts to broker a deal between Palestinian and Israeli negotiators but failed to make a breakthrough by the time the settlement freeze, imposed 10 months ago, expired at midnight Sunday, the Daily Telegraph reported.

Palestinian leaders have been insisting that they would leave the peace talks if the moratorium was not extended. The negotiations were launched Sep 2 to great fanfare in Washington.

US President Barack Obama's top policy adviser, David Axelrod, said that the White House had urged for a resolution throughout Sunday ahead of the deadline.

He said: "These talks themselves are absolutely crucial -- we're at a critical juncture in that region," he said. "We think it's essential that they keep on moving forward, keep on talking, keep on trying to work through these issues, and we're hopeful that they will."

Israeli Prime Minister Benjamin Netanyahu appealed to the settlers to display "restraint and responsibility" once the moratorium expired.

Palestinian President Mahmoud Abbas has previously threatened to quit the talks if the moratorium on settlement building was not extended.

Addressing the UN General Assembly Saturday, he called on Israel to "choose between peace and the continuation of settlements".

But as the Israeli and Palestinian delegations returned home, their chief negotiators remained in the US at the request of Obama, whose credibility in the Middle East is at stake if the talks collapse.

Israeli Defence Minister Ehud Barak said Sunday that there was still a "50-50" chance of "achieving a mutually agreed understanding about the moratorium".

Abbas has also spoken of his desire to keep the talks alive, while pledging that the Palestinians will not resort to violence if they collapse.

Palestinian officials have also said they would wait several weeks before making a decision on whether to withdraw from the talks.

But as both sides tried to find a way out of the impasse, the settlers at the heart of the row raised a fresh challenge by symbolically resuming construction on the hilltops of the West Bank that they vow will remain part of Israel for ever.

A bulldozer rumbled through the settlement of Kiryat Netafim, near the Palestinian city of Nablus, as the cornerstone of a new house was laid -- the first of 2,000 the settlers hope to build across the West Bank in the coming months.

Among the settlers there was a mood of outward jubilation, tempered by the fear that Netanyahu could still rein in their ambitions.

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