Reporting from Washington — Israeli and Palestinian leaders formally reopened peace talks Thursday by setting a work plan for the next year, but adjourned without progress on their conflict over Israeli housing construction in disputed areas, an issue that threatens to quickly undermine the negotiations.
Meeting at the State Department, Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas agreed to meet again on Sept. 15 and to work out an outline as the first step to reaching a final peace deal by next September. The two leaders, whose last face-to-face session was 20 months ago, plan to hold discussions every two weeks.
Secretary of State Hillary Rodham Clinton, who hosted the four hours of talks, praised the two leaders.
"The decision to sit at this table was not easy," she said. "We've been here before and we know how difficult the road ahead will be."
But diplomats said officials on both sides as well as their American colleagues remain deeply anxious over the settlement construction dispute. A partial Israeli moratorium on new settlements in the occupied West Bank ends on Sept. 26 and Jewish leaders are reluctant to extend it. At the same time, Palestinians have threatened to walk out on the talks if construction resumes.
U.S. officials have urged Israeli and Palestinian leaders to stop publicly declaring their positions, in hopes that it will be easier for each to give ground in coming weeks, according to diplomats who declined to be identified because of the sensitivity of the talks.
U.S. officials are hoping that if the talks gain momentum in the coming weeks, it will give officials on both sides the political cover to make compromises that, at the moment, only are likely to inflame their constituencies.
As talks continue, it also will become more difficult for the leaders to break off their participation, diplomats noted.
Yet diplomats and outside observers also say it's still difficult to see how a compromise could be reached.
Under one proposal, by Israeli Deputy Prime Minister Daniel Meridor, Israel would allow construction only in the large settlement blocs in the West Bank that Israel expects to annex in a final peace deal.
But critics say it will be difficult to sort out precisely which areas would be headed for annexation.
Akiva Eldar, a columnist for Israel's Haaretz newspaper, said on Israel Radio on Thursday that the Meridor proposal would be hard to implement because it would require both sides to agree, before negotiations take place, on which settlements would be part of Israel and which would be dismantled.
He said there will probably be sharp disagreement over settlements such as Ariel, which is about 12 miles inside the West Bank.
"Talking about the settlement blocs without a detailed map is like playing chess with yourself," he said. "The Palestinians [will] say, 'You won't get them for free. Show us a map.' "
Another possibility is for Israel to privately agree to construction limits while publicly announcing that the moratorium is over. Netanyahu reportedly agreed to such a deal in recent months regarding building in Jerusalem.
Under such an arrangement, Netanyahu could use his influence to block any large-scale construction.
But Yossi Beilin, a left-leaning analyst and former Knesset member, said that without a moratorium, the possibility would exist for a project to proceed and set off an uproar that would bring the talks to a halt.
"This is the wrong way to have negotiations," he said.
Despite behind-the-scenes U.S. pressure, Palestinian officials insist their position on the issue is firm. Some officials privately suggested they are willing to face the political consequences of publicly embarrassing President Obama by breaking off the talks.
The governments of Egypt and Jordan, whose leaders came to Washington to show support for the talks, have also indicated that they would back any Palestinian decision to break off talks over housing construction in the West Bank.
Several experts and officials also said there could be controversy over the plans for a two-stage process for a peace deal that begins with a so-called "framework agreement" that later leads to a more detailed final deal.
A U.S. official said the administration expects to complete both deals within a year.
Netanyahu and Abbas have both agreed to the two-stage plan. But some Palestinians and their Arab allies are expected to be suspicious of such a process, which could further delay creation of a Palestinian state.
Before Thursday's talks, Netanyahu and Abbas each used language intended to signal their flexibility in seeking peace.
Netanyahu told Abbas, "I see in you a partner for peace." Only last month, Netanyahu publicly questioned whether Abbas would be a "partner for peace."
Abbas, for his part, spoke of his commitment to security, which is the foremost Israeli concern.
"We consider that security is of the essence," he said.
David Makovsky, an analyst at the Washington Institute for Near East Policy, said Netanyahu was speaking in a code that "will resonate in a very important way inside Israel."
Times staff writer Edmund Sanders and news assistant Batsheva Sobelman in Jerusalem contributed to this report.