Mideast Quartet urges Israel to stop West Bank settlements

Former British Prime Minister Tony Blair, working as a Quartet envoy since he left Downing Street last summer, attends a meeting of Middle East peace Quartet, Friday, May 2, 2008 in London. The Middle East peace Quartet held talks in London on Friday and called on Israel to freeze continuing settlement construction in the West Bank to keep the peace process from collapsing. (AP Photo/Leon Neal, Pool)

LONDON—Palestinian Prime Minister Salam Fayyad warned Friday that peace talks could collapse unless Israel changes course and accepts a more conciliatory approach in negotiations.

Fayyad, in London for diplomatic talks, said Israel has not complied with any of the obligations set out at the U.S.-backed peace conference in Annapolis, Md., late last year.

"Israel has failed to meet any of its obligations from the road map, including a freeze in settlement activity," he said. "Unless that changes, the political process is being stripped of its meaning."

Fayyad gave a highly pessimistic progress report after meeting with Israeli Foreign Minister Tzipi Livni. He said the Palestinian government had met its commitments by reforming its financial sector and praised the donor community for providing additional money desperately needed by Palestinian authorities.

In response, Israeli diplomats released remarks that Livni made in private meetings with Fayyad and other leaders earlier in the day.

They said she had told Fayyad that 60 road blocks, one major checkpoint, and other impediments to Palestinian freedom of movement had been removed, and that an additional 5,000 work permits have been granted to help Palestinians seeking work inside Israel.

However, the United Nations says there are more than 500 obstacles impeding movement in the West Bank, including gates, checkpoints and dirt mounds blocking passages. The 60 impediments Livni referred to are mostly dirt mounds, the removal of which has had little significance.

"Many of these measures involve significant security risks for Israel," she said, according to the released remarks. "We expect the (Palestinian Authority) to live up to its obligations in order to ensure that these steps will not be exploited by terrorists and endanger further progress."

But she said Israel needs assurances that the Palestinians will actively fight terrorism before it takes any further steps.

Fayyad said the Palestinian Authority needed roughly $1 billion to meet its obligations for the second half of this year.

But he said Israel had refused to take steps that would allow normal economic activity in the West Bank and Gaza Strip.

The remarks came after the Middle East peace Quartet -- the U.S., Russia, the European Union and the United Nations -- urged Israel to cease all settlement activity in the West Bank. The diplomats called for more negotiations in the Israeli-Palestinian conflict.

There were no signs of a breakthrough, but Secretary of State Condoleezza Rice said an agreement on the creation of an independent Palestinian state remains possible during President Bush's waning days in office.

"It's hard work and it's labor intensive and I know there's skepticism, but I think they do have a chance to get an agreement by the end of the year and that's what we're going to work for every day," she said.

Rice cited Northern Ireland as an example of a conflict that seemed intractable until just before peace was achieved.

Rice said Arab countries that have pledged money to the Palestinian Authority, but not delivered, will be prodded to come up with the funding they have promised.

Last year, a Paris donor meeting netted $7.7 billion in aid pledges to the Palestinians over three years. The money was earmarked both for the Palestinian budget and reform and development programs. The optimism that surrounded the pledges has long since faded.

"Clearly when you make a pledge you ought to fulfill it, and that will be my message," Rice said.

According to U.S. figures, only $215 million of roughly $835 million pledged by Arab League nations has been handed over to the Palestinians, with the shortfall contributing to the economic and humanitarian crisis in the occupied territories.

Former British Prime Minister Tony Blair, a special Quartet envoy to the region, is focusing on the economic crisis. He expressed frustration Friday at the slow pace of negotiations with the Israeli government on agreements to lift roadblocks and checkpoints in the West Bank so normal business activity can resume.

With Blair's help, the struggling Palestinian government is organizing an investment conference in Bethlehem later this month. The meeting is designed to showcase moneymaking possibilities in the region for investors willing to gamble on the possibility of improved security conditions.

U.N. Secretary-General Ban Ki-moon, reading the statement after the Friday morning meeting, said the Quartet "expressed its deep concern" at Israel's continued settlement building on the West Bank and called for all outposts built since March 2001 to be dismantled.

Israeli Foreign Ministry spokesman Arye Mekel said the Jewish state was not building new settlements and was only allowing "natural growth" in existing settlements.

"We have not changed our position on this," he said.

The written statement by the Quartet members read out by Ban explicitly states that "natural growth" of the settlements is unacceptable.

He also expressed concern over worsening humanitarian conditions in the Gaza Strip.

A U.N. official reported Friday that rising prices and funding shortages have forced the U.N. to stop providing emergency food aid to more than 13 percent of the 750,000 Palestinian refugees it generally feeds in Gaza.

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Associated Press Diplomatic Writer Anne Gearan contributed to this report.