A senior Palestinian source told Haaretz that the American administration renewed its pressure on Palestinian President Mahmoud Abbas to stay in direct negotiations with Israel, even if some construction in the settlements resumes after the end of the current moratorium. The source warned that Abbas would not be able to agree to a renewal of construction and will be forced to withdraw from the talks.

          According to the source, a Palestinian okay to the renewal of construction just as direct talks are resumed is politically impossible. Sources in Ramallah said yesterday that both the Israelis and Americans know Abbas' likely course of action. At first, Abbas will demand that the talks not last longer than a year, culminating with the establishment of a Palestinian state in the 1967 borders, and with Jerusalem as its capital.

          Abbas would not be able to give up Palestinian sovereignty in East Jerusalem and especially the Temple Mount, but large Jewish neighborhoods would be retained by Israel. If this much is achieved, Abbas will be able to agree that the refugee issue will be resolved primarily within the borders of the new Palestinian state, with only a few tens of thousands receiving Israeli citizenship as a humanitarian gesture.