The poll by the Dahaf Institute found pessimism running high as the Israeli and Palestinian leaders gathered in Egypt for a second round of direct peace talks, which could collapse if a dispute over settlement building is not resolved in the next fortnight.

The Palestinians have repeatedly said they will walk out if Israel does not extend the moratorium, while Israel's right-wing government is strongly opposed to any further restrictions on settlement construction.

Just over half -- 51 percent -- of those surveyed thought Israel should resume construction when the freeze expires on September 26, while 39 percent said it should be extended, the poll found.

However, 42 percent said they would support a compromise whereby Israel would only build in major settlement blocs, with 32 percent saying construction should be fully renewed and 20 percent favouring a "comprehensive" freeze.

A strong majority of 71 percent did not believe the current round of talks would lead to a peace agreement, while 68 percent believed the resumption of settlement construction would derail the negotiations, the poll found.

Israelis were nearly evenly divided when asked if they would accept a peace deal where Israel withdrew from most of the occupied territories in exchange for Palestinian recognition of it as a Jewish state, with 45 percent in favour and 48 percent opposed.

The poll was based on interviews with 501 Israelis and had a margin of error of 4.5 percent, the institute said.

earlier related report
Core issues at heart of the Israeli-Palestinian conflict
Jerusalem (AFP) Sept 14, 2010 - Israel and the Palestinians were set for a new round of direct talks in Sharm el-Sheikh, Egypt, on Tuesday. Seventeen years after the Oslo accords were signed, the two sides remain far apart on key issues:

- PALESTINIAN STATE AND POWERS: The Palestinians want an independent and fully sovereign state in the West Bank and Gaza Strip. Israel wants a demilitarised Palestinian state and to retain control over its airspace and foreign borders.

- PALESTINIAN BORDERS AND JEWISH SETTLEMENTS: The Palestinians want Israel to withdraw from all land occupied since the 1967 war and to dismantle all Jewish settlements, although they have accepted the principle of land swaps.

Israel rules out a full return to pre-1967 borders but is ready to pull out of some parts of the West Bank while annexing its largest settlements.

The Palestinians want a freeze on all settlement building during the talks. Israel's partial 10-month moratorium on building is set to expire at the end of September.

- JERUSALEM: Israel captured Arab east Jerusalem in 1967 and later annexed it. It considers the city its "eternal and indivisible" capital.

The Palestinian Authority wants to make east Jerusalem, home to some 260,000 Palestinians and more than 200,000 Israelis, the capital of its future state.

At the 2000 Camp David peace talks, Israel offered to share sovereignty over the Arab sector. Prime Minister Benjamin Netanyahu has not reiterated the offer.

- REFUGEES: The Palestinians want Israel to recognise the "right of return" of the Palestinians who fled or were expelled when the Jewish state was created in 1948. With their descendants, they number 4.7 million refugees.

Israel rejects the demand.

- WATER: Israel controls 80 percent of underground water resources in the West Bank. The Palestinians want a more equitable share.

- 'JEWISH CHARACTER' OF ISRAEL: Netanyahu wants the Palestinians to accept Israel as "the state of the Jewish people." The Palestinians reject this, saying it implies an implicit renunciation of the right of return for refugees.

earlier related report
Clinton launches latest bid to advance Mideast peace talks
Sharm El-Sheikh, Egypt (AFP) Sept 14, 2010 - US Secretary of State Hillary Clinton tried on Tuesday to nudge along fledgling Israeli-Palestinian peace talks, seeking to prevent a rift over Jewish settlements from derailing them.

On her first visit to the Middle East since she launched the new talks in Washington on September 2, Clinton was to meet Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas in the Egyptian Red Sea resort of Sharm el-Sheikh.

The chief US diplomat held a preparatory meeting with President Hosni Mubarak of Egypt who also met with Netanyahu and Abbas.

Clinton was then to meet separately with the two leaders ahead of three-way talks.

On her way to Egypt from Washington, Clinton repeated US President Barack Obama's call on Friday for Israel to extend the 10-month moratorium on settlement construction that is due to expire on September 26.

But she did not rule out a deal between the two sides that would result in something short of an extension of the partial freeze.

"At the same time we recognise that an agreement that could be forged between the Israelis and the Palestinians on actions that would be taken by both sides that would enable the negotiations to continue is in the best interests of both sides," she said.

"This has to be understood as an effort by both the prime minister (Netanyahu) and the president (Abbas) to get over a hurdle posed by the expiration of the original moratorium in order to continue negotiations," she said.

"I think there's a lot of ways to get to the goal. Remember the goal is to work toward agreement on core issues like borders and territory that would, if agreed upon, eliminate the debate about settlements," Clinton said.

The Palestinians have warned that if the moratorium is not extended, the new peace talks could come to a complete halt.

But neither side wants to be blamed for the collapse of the talks.

"The prime minister is not looking to torpedo the negotiations, quite the opposite," a senior Israeli official told reporters shortly before Netanyahu set off from Jerusalem for Sharm el-Sheikh.

Netanyahu's spokesman Mark Regev said that Israel was seeking to negotiate an agreement quickly but one that would be implemented over a longer period.

"The goal is historic peace agreement within a year," Regev said. "The prime minister has spoken of a framework agreement. It is clear that implementation will be over time.

"We have no illusions about the difficulties," he added.

Tuesday's talks will have to tackle the agenda for the negotiations with Netanyahu reportedly wanting to first address future security arrangements and secure Palestinian recognition of Israel as a Jewish state.

But the Palestinians want to first define the borders of a future Palestinian state, address the status of Jerusalem and discuss the right of return of refugees who fled or were driven out of what is now Israel in 1948.

Another Israeli official travelling with Netanyahu told reporters that the agenda of the negotiations would be decided by Clinton.

The overwhelming issue surrounding the talks is the looming end of the settlement freeze.

"The direct talks between Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas begin with a poker game," an editorial in Israel's Haaretz newspaper said.

"On the table is the settlement freeze and the two players are raising the stakes ... Both players have a weak hand. Abbas can't embarrass Obama and bolt the talks and Netanyahu can't risk losing power.

"So the real question is not what will happen at the end of the freeze, but what Netayahu and Abbas will get in return for giving up their original positions," the paper said.

Clinton was also due to hold three-way talks with the Israeli and Palestinian leaders in Jerusalem.

During the flight over, Clinton said the "time was ripe" for a solution to the decades-old conflict.

"If you listen to both leaders, they recognise time is not on either of their sides," she said.

burs-jaz/kir

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