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Jerusalem's objections to US shuttle diplomacy between Israel and the Palestinians over final-status issues led to the postponement Monday night of a press conference at which US Secretary of State Condoleezza Rice was expected to outline this new initiative, senior diplomatic officials said Monday.
According to the officials, Rice was expected to announce that direct talks between Israel and the Palestinian Authority would be replaced by parallel discussions she would hold with both sides over "political horizon" issues dealing with the contours of a future Palestinian state.
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Israel has stated that as a result of the formation of the new PA unity government, it would no longer hold "substantive" talks with Palestinian Authority Chairman Mahmoud Abbas - only talks dealing with humanitarian and security issues.
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Rice's press conference was rescheduled for Tuesday morning, after which she was to fly back to Washington.
Rice met Prime Minister Ehud Olmert for dinner Monday night for the second time in 24 hours, and also met Abbas for the second time during a four-hour trip she made to Jordan, where she also met with King Abdullah II.
Before returning home, Rice will meet on Tuesday with the families of the three kidnapped soldiers.
Israeli officials said Rice had postponed the press conference to continue to work on the text of her message, and find the "right terminology" to describe the issues that the two sides have decided to explore through US mediation.
Israel, the official said, was opposed to dealing with final-status issues such as refugees and borders, something favored by the Palestinians.
"Israel's position is not in favor of talking about these issues at this point," the source said. "For instance, we think it is inconsistent to talk about refugees, because we think that the right of return for refugees undermines the two-state solution." Moreover, the official said, "engaging in final-status discussions now - when the time is not right and neither side is prepared - could lead, if the talks falter, to another round of violence, as was the case in 2000."
Rice seemed to be trying to allay Israeli fears when she said after a meeting with Foreign Minister Tzipi Livni that "I don't intend by any means to take control of the Israeli-Palestinian bilateral dialogue. I think it is very important."
But in a briefing with the traveling US press late Sunday evening, Rice outlined her new approach, saying that "given where we are, given all the uncertainties that we've been through, given that there are changed circumstances in the wake of the Palestinian unity government, it seemed to me that the best geography this time was bilateral and parallel."
In addition to this new shuttle diplomacy, sources said that Rice was trying to harness momentum for the process by enlisting greater support from the Arab world, in the belief that Arab-Israeli reconciliation could push the Israeli-Palestinian agenda forward.
In this context, one of the ideas currently being discussed is the possibility of some kind of regional conference.
Olmert, during a press conference he held Monday in Jerusalem with visiting UN Secretary-General Ban Ki-Moon, said he would respond in a "very positive manner" to an invitation to attend an expanded meeting of the Quartet that, in addition to the US, EU, UN and Russia, would also likely include the Arab Quartet - Arab, Jordan, Saudi Arabia and either the United Arab Emirates or Oman - as well as Israel and Abbas.
Ban said that no final decision on whether to convene this conference had been made, though he characterized it as an "interesting and useful idea to consider." The US, according to sources in Jerusalem, was trying to navigate between Israel's traditional objection to large regional conferences, which it feels places it at a distinct disadvantage, and Saudi Arabia's hesitancy to have direct bilateral discussions with Israel, preferring instead a more comfortable regional umbrella.
According to the sources, the US was trying to get the Saudis actively involved in the process as a leading moderate player that - with their financial resources and standing in the region - could have a major impact on the overall diplomatic process.
Saudi Arabia's foreign minister, meanwhile, suggested Monday that Arab leaders would be willing to consider changes in their 2002 peace initiative to make it "compatible" with new developments.
The public words from Foreign Minister Saud al-Faisal came as Arab League foreign ministers convened in Riyadh to prepare for a meeting of the Arab League on Wednesday and Thursday at which Arab leaders were expected to recommit in one form or another to the Arab Peace Initiative from March 2002.
Up until now, there has been little public indication that the Arab League would consider altering parts of the initiative to make it more palatable to Israel. But Faisal, in his opening remarks, suggested change was under consideration.
"It is expected from us to take notice of new developments, which require additions and developments in whatever is offered from our leaders about the issues and problems - in order for our resolutions to be compatible with what is dire and new," Faisal said.
Several other Arab diplomats said privately Monday that the Arab leaders were seeking fresh ideas for a way to moderate their position without being seen as giving in to Israeli or American demands to change the 2002 offer.
The diplomats said that Arab countries including Egypt, Jordan and Saudi Arabia would be proposing "a repackaging" of the deal.
Rice is believed to have been strongly pushing the Arab countries to offer some hope of changes in the plan.
Ban, who wrapped up his visit to Israel on Monday with meetings with Livni, Likud leader Binyamin Netanyahu, Vice Premier Shimon Peres and an IDF helicopter tour of the security barrier to give him an idea of the barrier's effectiveness, will attend the Riyadh summit.
Ban said after the fly-over of Israel that he "came to better appreciate the security concerns facing Israel." But, he said, he was still "deeply troubled" by the checkpoints, settlement growth and "the barrier where it appears on Palestinian lands."
Peres asked Ban to thank Saudi Arabia's King Abdullah VI for his efforts to bring about peace in the region, including pushing forward the peace process between Israel and the Palestinians and Israel and the moderate Arab states. Peres, in a statement issued by his office, said he emphasized that Israel was interested in negotiations, not dictates.
Peres's comments reflect Israel's position that whatever comes out of the Arab League summit should be a basis for negotiations rather than a take-it-or-leave it proposal.
AP contributed to this report.