U.S. hopes of Mideast progress scaled back?

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Hopes of a U.S.-sponsored push to resume stalled Middle East peace talks have been scaled back following U.S. Secretary of State John Kerry’s latest visit, to securing economic goals for the West Bank.

Internal Palestinian disputes including the rumoured resignation of prime minister Salam Fayyad have also dimmed the prospects of an early revival of peace negotiations with Israel.

U.S. President Barack Obama said on Thursday he believed there was a “window of opportunity” to kick-start peace talks, after Kerry returned from a three-day trip to the region.

But before Kerry’s departure on Tuesday, he made it clear that talks must be conducted properly rather than rushed.

“Each of us agreed to do some homework,” he said after meetings with Israeli Prime Minister Benjamin Netanyahu.

But “doing it right is more important than doing it quickly”.

Direct Israeli-Palestinian talks have been on hold for almost three years after grinding to a halt shortly after they restarted in September 2010, over the thorny issue of settlement construction.

So far, according to Abdel Majid Swilam, politics professor at Al-Quds University in east Jerusalem, “the Israelis haven’t responded at all as yet” to Palestinian overtures.

Palestinian president Mahmud Abbas has offered to temporarily refrain from pursuing legal action against Israel through the U.N. and the International Criminal Court, particularly on issues such as settlement building.

Obama had been counting on “goodwill” gestures from Netanyahu in return for bringing the Palestinians back to the negotiating table, Israeli media said, but received none.

“With regard to Palestinian demands for gestures -- that isn’t going to happen unless it’s (already) around the negotiation table”, an Israeli official told the news website Ynet on Wednesday.

Abbas demands that Israel stop settlement building in Palestinian territories and recognize the 1967 borders that existed before that year’s Six-Day War ahead of any resumption of talks.

Additionally, other Palestinian demands such as releasing prisoners and transferring weapons to the Palestinian Authority’s security services are “off the table”, an editorial in the Israeli daily Haaretz said on Thursday.

Kerry was only able to announce before he left Israel that there would be “efforts” towards strengthening the Palestinian economy.

“We are going to engage in new efforts, very specific efforts, to promote economic development and remove... bottlenecks and barriers that exist with respect to commerce in the West Bank,” he said.

The United States quietly unblocked $500 million in aid to the Palestinian Authority (PA), which governs the West Bank, after Obama’s first visit to the region as president in March.

And Israel decided last month to unfreeze tax revenues it collects on behalf of the PA, which it had frozen after the Palestinian bid for upgraded U.N. status in November, a move which angered both the Jewish state and Washington.

As such, “the outcome of Kerry’s trip was a retreat from political negotiations to the so-called economic development plan”, Hanna Amirah, an official in Abbas’s Fatah party, told local media.

But even an economic plan could run into trouble on the Palestinian side.

Last week, the Fatah Revolutionary Council for the first time openly criticized the economic policy of prime minister Fayyad, calling it “improvised and confused”.

A simmering internal crisis in the PA looked set to boil over on Thursday with rumors that Fayyad was to resign over a spat on the resignation of finance minister Nabil Qassis, which Fayyad accepted but Abbas opposed.

However, a senior official at the US State Department poured cold water on the idea, telling reporters he did not believe Fayyad was on the verge of resigning.

“He’s not tendering his resignation to the best of my knowledge. He’s not doing it,” the official said on the sidelines of G8 talks in London. “As far as I know he’s sticking around.”

A meeting between the premier and Abbas to discuss the issue was subsequently called off but was now set to take place on Saturday in Ramallah.