Netanyahu seeks 'new solutions' to Palestinian conflict

Israeli Prime Minister Benjamin Netanyahu said that creative thinking was needed to end the decades-old conflict with the Palestinians.

Washington meanwhile announced that US Secretary of State Hillary Clinton would travel to the region later this month for the first of twice-monthly meetings between Netanyahu and Palestinian president Mahmud Abbas.

And the Palestinians warned that failure to clinch an agreement would spell the end of Abbas's moderate, Western-backed Palestinian Authority and strengthen Islamists and other factions opposed to talks with Israel.

"We will need to think creatively, and in new ways, about how to resolve complex problems," Netanyahu told reporters at the start of Israel's weekly cabinet meeting.

"In order to reach practical solutions, we will need to think about new solutions to old problems," the right-winger said.

"To succeed, we will need to study the lessons of the 17-year effort at negotiations and to embrace original thinking, to think outside the box," he said, referring to the 1993 Palestinian autonomy accords.

Netanyahu insisted, however, that he was "willing to achieve an historic compromise with our Palestinian neighbours so long as it maintains the national interests of the state of Israel with security first and foremost."

The two sides relaunched direct peace talks at a Washington summit on Thursday after a 20-month hiatus, but the negotiations will face a major test later this month when an Israeli settlement moratorium expires.

The Palestinians have warned that if Israel does not renew the partial freeze on settlement construction in the occupied West Bank when it expires on September 26 the peace process will end.

Netanyahu, under pressure from right-wingers who dominate his ruling coalition to resume construction, has said settlements should be discussed alongside other core disputes that have bedeviled past attempts at peace, including the final status of Jerusalem and the fate of Palestinian refugees.

He plans to hold twice-monthly talks with Abbas starting with a September 14-15 meeting in Egypt's Red Sea resort of Sharm el-Sheikh, which will be attended by Clinton.

After attending the talks in Sharm el-Sheikh she will head to Jerusalem for further discussions, a State Department official said in Washington.

"Secretary Clinton will be joined in these negotiations by Special Envoy for Middle East Peace Senator George Mitchell," the official added.

Meanwhile chief Palestinian negotiator Saeb Erakat warned that should the latest attempt to reach a peace settlement fail, the moderate Palestinian leadership would disintegrate.

"We hope to bring (about) a Palestinian state. If we fail to bring it now, then I think we'll go home," he told AFP on Sunday.

The collapse of the moderate Palestinian leadership would leave the Islamist Hamas movement, which is sworn to Israel's destruction, at the head of the national movement.

"If we have an agreement, (Hamas) will disappear, and if we don't have an agreement, then we will disappear," Erakat warned. "I really hope that we can make it, God willing."

But Israeli Foreign Minister Avigdor Lieberman said on Sunday he does not believe a deal can be clinched within a year or even "during the next generation."

"Abu Mazen (Abbas) will not sign a comprehensive agreement. That's why we should look for a long-term interim accord and concentrate on Israel's security," Lieberman said in remarks broadcast on Channel 2 television.

In any case, he added, "the signing of a peace agreement does not mean the end of the conflict and of mutual demands as well as the recognition of Israel as the national state of the Jewish people."