by David Harris

    JERUSALEM, Aug. 23 (Xinhua) -- It is a term that sounds almost cliche after so many years of use, but this week "a crucial meeting" will take place between Israeli Prime Minister Benjamin Netanyahu and United States special envoy to the Middle East George Mitchell. Both parties believe they are close to striking a deal that will result in a resumption of peace talks between Israel and the Palestinians.

    One basic Palestinian precondition for a resumption of negotiations that ended last year is that Israel ends all settlement activity. There is huge speculation these days that agreement to that effect, at least on a temporary basis, could well be reached when Mitchell and Netanyahu meet in London on Wednesday.

    The terms of the deal in the making are still unclear, however, media reports in the U.S. and Israel suggest, Israel will not start any new construction but will be allowed to complete work on buildings already started. However, the Americans are looking for a two-year building freeze, while the Israelis have proposed six months, said the reports.

    "I find it hard to believe that Netanyahu would be able to extract an agreement from the cabinet to any more than six months "maybe, it will go to a year," said Shlomo Slonim, an expert on Israeli-American relations at the Hebrew University of Jerusalem.

    In the late 1970s, when then U.S. President Jimmy Carter was trying to eke out a deal between Israel and Egypt, the Israeli prime minister of the day, Menachem Begin, would only agree to a three-month moratorium on settlement activity.

    Some 250,000 Israelis currently live in a mix of villages and small towns in the West Bank. The Palestinians and the leading lights in the international community see these settlements as the major impediment to peace.

    The Israeli anti-settlement group Peace Now published a new report on settlement growth on Sunday, suggesting that construction of 600 new buildings in West Bank settlements began in the first half of 2009 alone, with 96 new buildings constructed in the illegal outposts.

    Agreement to freeze all settlement activity would be a major sign of Israel's seriousness in its desire to return to the negotiating table, but could also prove to be politically damaging to Netanyahu at home.

    "The question is what would be the quid pro quo," Slonim wondered. It is what Israel will or will not gain in return that could well determine how much support Netanyahu receives from his ministerial team.

    Israel has three major concerns from this perspective.

    First, will the moratorium include Jerusalem? The Netanyahu government has already come to verbal blows with U.S. President Barack Obama over Israel's insistence that it to be allowed to build wherever it wants in eastern Jerusalem. Israel views Jerusalem as the indivisible capital of the Jewish state, but the United Nations argues that the Arab-dominated east of the city is occupied territory. The Palestinians insist their capital will be located in eastern Jerusalem.

    The Israeli daily Ha'aretz revealed on Sunday that a plan for the building of a new settlement, Ma'aleh David, in east Jerusalem was filed for approval by the relevant municipal committee at the Jerusalem Municipality.

    The new settlement, calling for construction of 104 housing units in the middle of an Arab neighborhood, is planned to be connected to an existing Jewish neighborhood, Ma'aleh Zeitim, and together will be occupied by some 200 families, forming the largest Jewish settlement in east Jerusalem.

    Secondly, Israel wants to receive some form of guarantee that the Palestinians will end all attacks on Israelis.

    On this issue, Washington has already lent Israel its full support. When Obama hosted Egyptian President Hosni Mubarak at the White House last week, he told reporters that Israel has shown willingness to work on the settlement issue, and now the Palestinians also have to show their preparedness to improve security.

    The third item that would give Israel the confidence to move ahead is a signal from the Arab world that it is serious about a normalization of relations with Israel.

    There have been rumors of noises from some Gulf states that, should Israel agree to a settlement freeze, they are ready to allow the reopening of Israeli trade offices in their capitals.

    However, also some Arab states like the Saudis are skeptical of this move. Over the last three weeks, some Saudi officials have said that Israel should not be rewarded until it fulfills all its obligations under international law. The Saudi-initiated Arab peace offer of a normalization of relations with Israel should only be applied once Israel withdraws from all the territory it captured in the 1967 war, Riyadh argues. In other words, there should be no quid pro quo for just an Israeli settlement freeze.

    For now, the Israeli government is being tight-lipped about Wednesday's Mitchell-Netanyahu meeting, neither confirming, nor denying reports about the likely settlement freeze, its duration or its scope.

    "Over the past weeks we've had a constructive dialogue with the administration. We are narrowing the gaps and we are hopeful that it will be possible to find common ground that will enable a re-energized peace process," Netanyahu's spokesman Mark Regev told Xinhua on Sunday.

    However, Netanyahu is said to be playing down expectations ahead of Wednesday's London meeting. He told ministerial colleagues during Sunday's weekly cabinet session that "it would be wrong to describe this week's meeting as a 'be all and end all meeting,'" according to a government official.

    While Israel is seemingly happy to foot-drag as much as possible, the Obama administration wants to see quick progress. The president has made the Israeli-Palestinian peace process one of his foreign policy priorities. Obama along with his secretary of state, Hillary Clinton, has made it clear that Mitchell is the man for the job and they are taking his opinion very seriously.

    "What's clear is that it's Mitchell who is making the recommendations directly to Obama," the Israel-Palestine Center for Research and Information told Xinhua in a statement.

    The organization added that it is impossible to know ahead of time exactly what the American proposals are, because "there are zero leaks" from Washington.

    That means at this stage there is no way of knowing whether agreement will come out of this week's session. However, there is general agreement in Israel that the Netanyahu-Mitchell talks are exceedingly important, and even if there is no conclusion this week, the sides are moving inexorably closer.

Special Report: Palestine-Israel Conflicts