Israeli Prime Minister Benjamin Netanyahu yesterday proposed a new settlement freeze in exchange for Palestinian recognition of Israel as the Jewish homeland, a move swiftly dismissed by the Palestinians.

In a speech at the opening of the winter session of Parliament, Mr Netanyahu spelled out his price for a renewal of a freeze on Israeli settlement building in the occupied West Bank, which is seen as key to salvaging peace talks which the Palestinians are threatening to abandon.

“If the Palestinian leadership will unequivocally say to its people that it recognises Israel as the national state of the Jewish people, I will be ready to convene my Cabinet and ask for another moratorium on building,” he said.

“I have already passed on the message through quiet channels and I am now saying it in public,” he said in a live televised address.

But his offer was immediately rejected by Palestinian chief negotiator Saeb Erakat, who said the issue was completely unrelated to the crisis in the peace talks.

“This order has nothing to do with the peace process or with the obligations that Israel has not implemented,” Mr Erakat said from Amman, Jordan. “This is completely rejected.”

Direct peace talks between Israel and the Palestinians began on September 2 but ground to a halt two weeks ago after the expiry of a partial 10-month moratorium on Jewish settlement building.

Despite huge diplomatic pressure to reimpose the freeze, Mr Netanyahu has refused to do so, instead urging the Palestinians not to abandon the talks.

Recognition of Israel as a Jewish state has never been one of the core issues for resolving the conflict, but since Netanyahu came to power in 2009, it has become one of his key demands in any peace deal with the Palestinians.

“I’m not setting this as a condition for talks,” he said yesterday. “But there is no doubt that such a step on the part of the Palestinian Authority would represent a confidence-building measure which would open a new horizon of hope and also trust.”

The Palestinians formally recognised Israel as a state on the eve of the 1993 Oslo Accords, but have rejected the demand to recognise its Jewish character because that would amount to an effective renunciation of their cherished right of return for refugees from the 1948 Arab-Israeli war.

“What could convince the government, and more so the citizens of Israel, that the Palestinians are truly ready to live with us in peace?” Mr Netanyahu asked rhetorically.

“Something that would signal a real change on the Palestinian side?”

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