Mideast sides look at alternatives to continuing peace talks

JERUSALEM -- With peace talks stalled, Israelis and Palestinians are quietly -- and separately -- looking for alternatives.

The scenarios range from the Palestinians going around Israel to seek world recognition for an independent state to Israel pushing for a scaled-down agreement that sidesteps the toughest issues, like sharing Jerusalem and the fate of Palestinian refugees.

The thinking is that few people believe a full peace deal within a year is achievable. And the impasse that has emerged over settlement construction has brought a difficult question to the surface: If the United States cannot compel Israel to extend a settlement freeze for a few months, how can the U.S. persuade Israel to make wrenching decisions over control of Jerusalem?

Both sides claim their first choice is still a full agreement, and the Obama administration is clinging to the hope that the peace talks will succeed.

But Secretary of State Hillary Rodham Clinton acknowledged in a speech to Palestinian Americans on Wednesday that it's a struggle.

"I cannot stand here tonight and tell you there is some magic formula that I have discovered that will break through the current impasse," she said.

Palestinians say the current situation cannot drag on indefinitely: They have a measure of self-rule in the main cities of the West Bank, but Israel controls the land in between and remains ultimately in charge, controlling the Palestinians through a complex permit system. The Gaza Strip, meanwhile, has essentially broken off -- an isolated statelet run by the Islamic militant group Hamas, which rejects the peace talks.

Palestinian officials said they don't expect Palestinian President Mahmoud Abbas to take drastic action before the year set aside for negotiations is up in September. However, Abbas is starting to prepare for other options, and on Wednesday, more than a dozen senior Palestinian officials met for the first time -- at the president's request -- to discuss ideas.

The main alternative, according to officials, is to seek U.N. Security Council recognition of a Palestinian state in the West Bank, Gaza and east Jerusalem, the territories Israel captured in the 1967 Mideast war.

"The U.N. is a possible option because this political battle ... needs to be transferred to the broader courtyard," said Yasser Abed-Rabbo, a top official of the Palestine Liberation Organization.

While such validation would not immediately change the situation on the ground, it could boost Palestinian leverage vis-a-vis Israel. International recognition of Palestine's borders could also further isolate Israel and limit the Jewish state's diplomatic and military options.

Chief Palestinian negotiator Saeb Erekat said the Palestinians would first seek recognition from the United States.

The Palestinians know that may be difficult to obtain but hope that by next fall, they will have won sufficient international support to make the idea palatable, should the need arise. At that time, Palestinian Prime Minister Salam Fayyad will have completed his ambitious two-year plan to build the institutions of a Palestinian state.

Achievements on the ground "will contribute to convincing the international community to take a more active role in allowing for the independent Palestinian state by then," government spokesman Ghassan Khatib said.

Israel would surely oppose such a unilateral Palestinian move.

But among many Israelis as well, skepticism about peace talks is accompanied by a gnawing sense that something must change: the occupation is ruining the country's reputation and there's concern that without a decisive break from the West Bank, Israel will become, in effect, a binational state with a dwindling Jewish majority.

Many Israelis also a fear another Palestinian uprising if peace efforts run aground. "Violence erupts every time peace talks fail and that is what will happen again," said Gil Zaken, 35, a computer graphics designer. "It will be a big mess."

Concerns about Israel's future have driven even right-wing parties once opposed to territorial concessions toward more moderate positions. Prime Minister Benjamin Netanyahu himself endorsed -- albeit grudgingly -- the idea of a Palestinian state in 2009, and agreed to the peace effort launched by President Barack Obama last month.

But the talks stalled within weeks, when Israel refused to extend a 10-month freeze on new settlement construction. And Vice Premier Moshe Yaalon recently said that not one member of the key group of seven Cabinet ministers -- which includes Netanyahu, Defense Minister Ehud Barak and himself -- believes a full peace treaty is achievable within a year.

Now a debate simmers over alternatives.

Talk of scaling back expectations is coming from opposite corners of the political map. Both Yossi Beilin, a prominent dove, and Education Minister Gideon Saar, a hard-liner from Netanyahu's Likud, have suggested that this might be the only way to move forward.

Under this idea, Israel would no longer seek an "end of conflict" declaration from the Palestinians -- which would presumably lower the price of a deal. The Palestinians would get a state in most of the West Bank, with international safeguards about a future deal, but decisions on Jerusalem and refugees would be put off.

The Palestinians adamantly reject such a scenario, fearing that they would lose any further leverage and end up with a mini-state.

But Beilin believes that they can be persuaded that it is simply the only way to achieve statehood.

"It is better to have something than to have nothing," Beilin told The Associated Press.

Other surprising ideas have emerged on the Israeli right, where one would expect nationalists trying to strengthen the Jewish nature of the state. Now former Defense Minister Moshe Arens and Knesset Speaker Reuven Rivlin are calling for the West Bank to be annexed and its Palestinians eventually offered full citizenship -- moves that would take Israel a long way toward being a binational state.

Some Israelis also speak of the idea of unilateral pullouts from some parts of the West Bank they don't want, outside the framework of an agreement with the Palestinians, reminiscent of Israel's 2005 unilateral pullout from Gaza.

Another possibility that has been discussed: Might the Palestinian president dissolve his self-rule government and kick back to Israel the costly burden of full rule over the Palestinians?

All of this is at odds with the widespread notion that the basic contours of a comprehensive deal are somehow clear and inevitable.

Under the generally assumed parameters of such a deal, Israel would retain only a tiny fraction of the West Bank, but these would be areas close to the pre-1967 border where many of the 300,000 settlers live. The rest of the settlers would be removed. The sides would find a formula to share Jerusalem. And the Palestinian demand that millions of refugees have a "right of return" to Israel will be finessed.

But these ideas have been around for over a decade, with no one able to bridge the gaps. And Israelis still find it close to inconceivable that Palestinians might control the Old City with its holy sites, border guards perhaps gazing from its ancient walls upon the King David hotel and the main shopping street in Jerusalem.

"The whole strategy (of reaching a comprehensive deal) hasn't worked," said Aaron David Miller, a senior former State Department official involved in negotiations. "I don't think you can produce this with these leaders."

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Associated Press writers Mohammed Daraghmeh in Ramallah and Ian Deitch in Jerusalem contributed to this report.