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Palestinians say full settlement freeze is precondition to new peace talks

A lead Palestinian peace negotiator says the demand for a full settlement freeze – not a partial one – is a precondition to resuming peace talks. But a meeting between Prime Minister Netanyahu and Palestinian Authority President Abbas is still possible in September.

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"You're still delaying all the real issues," he says. "This is a wrong start for Obama. He is escaping the whole issue. He wants to be reelected and he is not going to pressure Israel. People here expected him to be much more solid."

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Mohammed Kaush, writing in Jordan's al-Arab al-Youm, captured Arab skepticism. "Netanyahu is manoeuvring ... and wants to draw attention to side issues to buy more time and create new facts on the ground. This will extinguish any hope that a state or even autonomy could be created," he argued.

Will Saudi Arabia approve?

It remains an open question whether any Arab governments will agree to partial normalization. Egypt and Jordan already have full diplomatic relations with Israel, leaving little to gain on those fronts, which makes large and wealthy Saudi Arabia potentially crucial to the new venture's credibility.

Khalil el Anani, an analyst with the Al Ahram Center for Political and Strategic Studies in Cairo, describes improved relations with countries such as Qatar and Morocco as irrelevant to Israel's regional goals.

"Saudi Arabia is the real prize," he says. "But I don't think Saudi Arabia can open the subject with their own people about normalization."

Qatar hosted a longstanding Israeli trade mission for years and only severed relations in January over Israel's siege of Gaza. Morocco has long had quietly warm relations with the Jewish state, although never a formal treaty. Then-Israeli Prime Minister Ehud Barak attended the funeral for Morocco's King Hassan II in 1999.

Saudi Arabia strongly opposes any sort of incremental normalization measures and continues to back its 2001 Arab peace initiative, which offered full diplomatic relations with most of the Arab and Islamic world in exchange for a full Israeli withdrawal from all of the West Bank and Gaza.

"Saudi Arabia has made it very clear that they will not change their position … not even a symbolic step," Nafaa says.

Another open question is the role of the Egyptians. With their own Israeli peace deal in hand and warm relations with the US, they have long positioned themselves as indispensable negotiators – as well as diplomatic rivals to the Saudis, who have sought greater regional influence in recent years. Egypt, which is home to the Arab League, could provide political cover for any smaller states that agree to take normalization steps. "Egypt may be asked to lend political support for those Arab states that do take steps toward normalization," the Arab diplomat says.

Nafaa puts it less diplomatically. "Egypt gave up all of its cards. There's nothing for the government to do except pressure the Palestinians," he said.