Finance Minister Yair Lapid will meet on Sunday with his Palestinian counterpart, Shukri Bishara, picking up the previous government’s process of economic cooperation that ended in November 2012, prior to Israel’s national elections.

In the meeting – planned in coordination with Prime Minister Binyamin Netanyahu – Lapid hopes to renew economic discussions between Israel and the Palestinian Authority.

Lapid said Saturday night that such dialogue is important and that he intends to advance economic issues standing between the two sides, though he failed to specify which ones.

On Tuesday, PA Deputy Prime Minister Mohamed Mustafa said that the authority’s debts had reached $4.2 billion, and said aid would be necessary to pay salaries in the coming months.

US Secretary of State John Kerry, who last week postponed his fifth visit to Israel since starting in the position, has made boosting the Palestinian economy a central tenet of his push to renew direct peace talks, which have been largely frozen since December 2008. In May, Kerry announced a plan to direct $4b. of private investment into the Palestinian economy to help foster private business.

The Palestinians, however, have continued to refuse to hold direct talks with Israel until it halts West Bank settlement activity and Jewish building in east Jerusalem.

Defense Minister Moshe Ya’alon blamed the Palestinians for the continued stalemate when he spoke Friday at the Washington Institute for Near East Policy while visiting Washington.

Israel, he said, was ready to hold immediate talks without preconditions.

“So far the Palestinian side is rejecting coming to the table. They want to get something for coming to the table,” he said.

He dismissed the Arab League decision last month to modify its 2002 peace initiative for a two-state solution on the pre-1967 lines, to include moderate equitable land swaps.

“It’s a spin, to my mind. It’s not a decision of the Arab League or whatever,” Ya’alon said.

He said he agreed with Netanyahu’s characterization of it as a dictate. “We are ready to sit to the table without preconditions, but without dictation,” Ya’alon said.

Under the plan, Israel must accept the pre-1967 lines and give up east Jerusalem and only then, will the Arab states consider opening relations with Israel, Ya’alon said.

Ya’alon added that he believed progress toward peace with the Palestinians would only occur once they recognized Israel as aa Jewish state and halted incitement in their education.

Palestinian children are taught to admire suicide bombers as martyrs, he said.

“Israel does not appear on their maps. There is no Israel. We are all settlers, those who live in Tel Aviv or Beit El. We are all settlers, colonialists. Without this kind of change, I cannot be optimistic regarding any final settlement based on current ideas,” Ya’alon said.

“The problem is their [Palestinian] reluctance to recognize our right to exist as a nation state of the Jewish people in any boundary. This is the core of the conflict, and not anything else,” Ya’alon said.

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