Palestinians warn Israel on settlers before talks

By Wafa Amr

RAMALLAH, West Bank (Reuters) - Palestinians warned on Monday they might boycott peace negotiations starting this week after Israel defied Washington and other international sponsors of the process by planning new homes on occupied land.

The chief negotiators, former Palestinian prime minister Ahmed Qurie and Israeli Foreign Minister Tzipi Livni, met to prepare the launch of talks on Wednesday. The negotiations, after an often violent seven-year hiatus, follow two weeks after U.S. President George W. Bush hosted a conference at Annapolis.

Senior Palestinian officials said Qurie, insisting Israel honour a pledge renewed at Annapolis to halt settlement activity in the West Bank, demanded it cancel a construction tender, announced just days after the conference. The tender was to build over 300 homes and other units in an existing settlement near Jerusalem on land Israel annexed from the West Bank after it occupied the territory in 1967.

If not, they said, some leaders have proposed a boycott over the development at the site, where the start of building 10 years ago triggered a collapse in peace talks in 1997.

"There's a debate within the Palestinian leadership between those who call for boycotting talks on Wednesday and those who say go, but focus only on demanding a settlement freeze," said Azzam al-Ahmad from President Mahmoud Abbas's Fatah party.

Livni's spokesman said only that the meeting was to prepare discussions on Wednesday between Abbas and Israeli Prime Minister Ehud Olmert.

Israel says the settlement at Har Homa, known as Abu Ghneim by Arabs, is not covered by commitments in the 2003 road map peace plan because it was annexed to Israel.

That annexation is not recognised internationally and Palestinians see building at the site, just north of Bethlehem, as part of Israeli efforts to divide the West Bank in two and encircle Arab East Jerusalem, which Abbas wants as the capital of a Palestinian state in the West Bank and Gaza Strip.