The Knesset Foreign Affairs and Defense Committee said in a report presented Tuesday that recognition of Palestinian statehood in the United Nations this September would harm Israel's standing in the international arena and could lead to a continued state of escalation, Israel Radio reported. Heading the team that prepared the report was MK Yonathan Plesner of Kadima.

One of the report's central findings was that the IDF Intelligence Directorate, the Mossad and the Shabak (Israel Security Agency) believe if the the peace process is restarted, it would be possible to prevent the Palestinian initiative in the United Nations, Israel Radio reported. The report added that the Palestinian strategy has worked and predicted the UN General Assembly would accede to the request to recognize Palestine as a state.

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With the September UN initiative just weeks away, Israeli officials are saying they are willing to accept pre-1967 lines as the basis for peace talks, as long as Palestinians agree to recognize the Jewish state.

Israel raised the formula as officials from both parties, the US, EU and Russia are continuing to work on a document to provide a framework for a return to negotiations that could make a Palestinian bid at the UN superfluous.

Government officials said that since the July Quartet meeting there have also been signals that the Palestinians themselves were looking for ways to come off the UN statehood recognition tree, with PA Prime Minister Salam Fayyad and other senior Fatah members saying as much recently.

Though Netanyahu told the Knesset Foreign Affairs and Defense Committee on Monday that he believed Abbas had made a strategic decision to go to the UN on the statehood issue no matter what, there is a feeling in Jerusalem that others in the Palestinian hierarchy are not as set on this path.

Palestinian Authority officials on Tuesday dismissed as “valueless” reports that Israel and the US have been working to develop a new framework to revive the peace process.

The officials said that the PA was determined to proceed with its plan to ask the UN in September to recognize a Palestinian state on the pre-1967 lines, despite the reports about the Israeli-US effort.

Khaled Abu Toameh and Hilary Leila Krieger in Washington contributed to this report

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