TEL AVIV (Reuters) - Israeli Prime Minister Benjamin Netanyahu expects no breakthroughs at a meeting this week with a US peace envoy, but hopes talks with the Palestinians can resume within two months, a spokesman said on Monday.
A right-winger in power since March, Netanyahu has resisted Western pressure to freeze Jewish settlements on occupied land where Palestinians seek statehood. The dispute has opened a rare rift between Israel and its top ally, the United States.
Speaking before a London visit during which Netanyahu is due to meet US envoy George Mitchell, his spokesman Nir Hefetz told reporters: "The prime minister expects there to be a certain degree of progress, but no breakthrough is expected." Mitchell has been trying to reach an agreement with Israel on a settlement freeze that US President Barack Obama has demanded in accordance with a 2003 peace "roadmap" that also calls on the Palestinians to rein in armed groups.
Netanyahu will make clear that Israel intends to "attend to the normal needs" of its settlers "alongside a political process that is to be launched in about two months' time", Hefetz said.
Media reports have spoken of a possible summit between Netanyahu and Palestinian President Mahmoud Abbas, overseen by Obama, on the sidelines of next month's UN General Assembly in New York.
Netanyahu's four-day trip to London and Berlin includes talks with British Prime Minister Gordon Brown and German Chancellor Angela Merkel. Both leaders have been critical of Israel's settlement policy.
Abbas has made a resumption of peace talks with Israel, suspended since December, conditional on a settlement freeze.
"Anything short of complying with the demands of the roadmap, with the demands of President Obama ... [and] the Palestinians won't be able to go to any negotiations," said Nabil Abu Rudeina, an Abbas spokesman.
US assurances
Israeli media reports suggest a wide gap remains between Israel and Washington. Netanyahu is keen to limit any settlement freeze to a six-month period and continue projects already under way.
The United States wants at least a two-year suspension.
Netanyahu has also sought US assurances that a settlement deal would be accompanied by initial steps by Arab countries to normalise ties with Israel.
"The prime minister has not agreed to anything, and I don't know if he will agree," Israeli Culture Minister Limor Livnat said when asked in a radio interview about the US overtures.
But Netanyahu's talks could result in a deal "for a period of time [limiting] the launch of new construction projects" in West Bank settlements, Livnat told Israel Radio.
Some 500,000 Jews live in the West Bank and Arab East Jerusalem, territory Israel captured in a 1967 war and also home to 2.5 million Palestinians. The World Court has branded the settlements illegal. Nor has Israel's claim to all of Jerusalem as its "eternal and undivided capital" been recognised abroad.
Palestinians want to establish a state in the West Bank and Gaza Strip, with its capital in Jerusalem. But Abbas' mandate is shaky, as rival Hamas Islamists who reject coexistence with the Jewish state seized control of Gaza in 2007.
Fayyad unveils plan
Palestinian Prime Minister Salam Fayyad will on Tuesday unveil his plan for building the institutions and infrastructure of the state of Palestine, which he says can be readied in the next two years.
Not so much a blueprint as a wish-list, the 65-page plan calls for a new international airport in the Jordan Valley and new rail links to neighbouring states, and proposes a generous tax regime for foreign investors.
The Palestinian Authority which Fayyad heads is dependent on foreign assistance for most of its budget. A copy of the plan was obtained by Reuters ahead of publication.
The plan is short on detail, but setting out these objectives is a departure from Palestinian policy over the past 15 years, which focused exclusively on negotiations with Israel rather than building institutions.
Western-backed Fayyad says Palestinians must not wait for a final peace settlement with Israel but get on with creating their state.
"We call upon all our people to work together on the basis of full partnership in the process of completing and building the institutions of a free, democratic and stable state of Palestine," the plan states.
"The world should hear the clear and united position from all walks of Palestinian society ... that the Israeli occupation is the only obstacle that hinders the stability, prosperity and the progress of our people and their right to freedom, independence and a decent life." Fayyad, a technocrat with no significant political base, heads a newly aligned Cabinet with more ministers than before from Abbas’ dominant Fateh faction, whose Islamist Hamas rivals refuse to recognise the premier.
On the political level, the plan is in harmony with the position of Abbas, who wants to establish a state on all territories that Israel occupied after the 1967 war, with Arab East Jerusalem as its capital.
The document says the government will focus on improving the performance of Palestinian security services, as part of its commitment to crack down on fighters as stipulated in the internationally backed peace plan or "roadmap".
It speaks of building infrastructure, securing energy sources and water, and improving housing, education and agriculture. But no detailed prescriptions are included.
"The government will work on encouraging investment in Palestine through offering tax cuts to local and foreign investors [and] will review investment regulations and remove obstacles that hinder investment," says the document.
"Our national duty stipulates that we should do whatever we can to get our economy out of the cycle of dependency and alienation."
Meanwhile, Israeli forces killed a Palestinian on the Israel-Gaza border on Monday, Palestinian medical workers said, and fighters in the Gaza Strip fired two mortar bombs at southern Israel.
The medical workers identified the dead man as a farmer and said the Israeli army told them to come to the frontier - an area Israel has declared off-limits to Palestinians and where fighters have planted bombs in the past - to pick up his body.
A second Palestinian was wounded in the incident, the medical workers said, also identifying him as a farmer.
The Israeli military had no immediate comment on the shooting, but said two mortar bombs were fired from the northern Gaza Strip and struck Israel. Israeli media reports said a soldier was slightly wounded.
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