Prime Minister Benjamin Netanyahu said Sunday he will deliver a major policy address next week laying out his proposed road to Mideast peace, after coming under stiff U.S. pressure to freeze West Bank settlement construction and endorse Palestinian statehood.
Netanyahu offered no hint of what he might say. Bound by his hardline coalition and his own ideology, the Israeli leader has resisted the U.S. demands so far, deepening an unusually public faceoff with Israel's most important ally.
"It must be understood, we seek peace with the Palestinians and with the states of the Arab world while trying to reach as much understanding as possible with the United States and our friends abroad," the Israeli leader said at the start of the weekly Cabinet meeting.
"Next week I will make an important policy speech in which I will present to the citizens of Israel our principles on achieving this peace and security," he said.
The Palestinians want the West Bank and Gaza Strip for their future state and say they won't renew peace talks until Israel agrees to freeze settlement construction and negotiate Palestinian statehood.
Obama pressing for settlement freeze
President Barack Obama's administration hopes that halting settlement expansion would encourage the Arab world to make overtures toward Israel, as well as improving U.S. relations with Arab states. In speeches last week in Egypt and Europe, Obama pressed hard for a settlement freeze and a two-state solution.
Israel has claimed that it reached unofficial agreements with former President George W. Bush's administration to keep building in some existing settlements. It has also cited a 2004 letter signed by Bush saying any peace deal would recognize "new realities on the ground" in the West Bank, seen as a reference to main settlement blocs close to Israel.
Many of the understandings were reached between 2001 and 2003, according to Dov Weisglass, who was a top aide to then-Prime Minister Ariel Sharon. The Bush administration agreed to allow construction within the boundaries of existing settlements, Weisglass told Army Radio.
However, U.S. Secretary of State Hillary Rodham Clinton said on Sunday that the White House would not recognize past informal understandings. "That was never made a part of the official record of the negotiations," Clinton said in comments broadcast on ABC-TV.
The U.S. pressure is pushing Netanyahu into a difficult position, caught between preserving Israel's crucial alliance with Washington while placating his coalition government, dominated by hardliners. Netanyahu's own long-held commitment to Israeli rule over the West Bank is also a factor.
Since Israel signed its first accord with the Palestinians in 1993, the West Bank settler population has more than doubled to nearly 300,000. An additional 180,000 Jews live in neighborhoods in east Jerusalem, which Palestinians claim as capital of their hoped-for state.
Mitchell heading to region
Obama plans to dispatch his special Mideast envoy, George Mitchell, to the region this week to try to break the impasse. Mitchell has long seen a settlement freeze as intrinsic to progress on peacemaking.
While fending off U.S. pressure for a settlement freeze, Israel has dismantled several checkpoints that hindered Palestinian movement. On Sunday, troops removed two checkpoints around the town of Qalqiliya, home to 50,000 Palestinians. Last week Israel tore down two other checkpoints.
Hundreds of checkpoints and unmanned roadblocks still dot the West Bank. Israel says they are a key part of a successful military strategy that has slashed Palestinian attacks, while Palestinians charge that they cripple trade and movement.
Meanwhile Sunday, Palestinian Prime Minister Salam Fayyad said the Palestinian Authority is not receiving enough aid to balance the budget, has been forced to take loans and now owes banks between $600 million-$700 million.
"We are not very far from hitting the brick wall," Fayyad told The Associated Press after a news conference in Oslo. He spoke on the eve of a donor conference there.
Many economic analysts say Arab donors have been reluctant to pay up because of Palestinian infighting between Western-backed President Mahmoud Abbas' Fatah, which controls the West Bank, and the Islamic militant Hamas, which took Gaza two years ago.
Israel pays Palestinian families
In a separate development Sunday, Israel awarded $82,000 in compensation to 50 Palestinian families whose properties were damaged in rioting by Jewish settlers last year in the West Bank city of Hebron, according to military spokesman Maj. Guy Inbar.
The settlers went on a rampage last December to protest their forced eviction from a disputed building.
Israeli authorities also prevented from entering a contingent of protesters dressed like clowns from entering the blockaded Gaza Strip, including a group calling itself the Israeli Clandestine Insurgent Rebel Clown Army.
Among the protesters was Hunter Campbell Adams, better known as Patch Adams, a U.S. doctor and clown who was the subject of a 1998 Hollywood film. The protesters brought toys they said they hoped to bring to children in Gaza.
The military said the group had not requested permission to enter Gaza.
