Secretary of State Hillary Clinton called on Israelis and Palestinians to focus on the big-picture issues that divide them Friday, as the US seeks a formula that will launch negotiations despite Palestinian refusals to talk without a full settlement freeze. Clinton positioned the settlement issue as one that would be resolved in an agreement over borders, which she referred to as one of the final-status issues that the US hopes the parties would address "as soon as possible." "I think we need to lift our sights and instead of looking down at the trees, we need to look at the forest," she said at a press conference with Jordan's Foreign Minister Nasser Judeh, with whom she met on Friday. "And as Minister Judeh and I discussed earlier, resolving borders resolves settlements, resolving Jerusalem resolves settlements," Clinton said. "We hope the [American optimism] is true. Israel is ready to resume talks," an official in the Prime Minister's Office said in response to Clinton's remarks over the weekend. The government believes there is "a growing consensus in the West and among Arab states that it's time to return to direct Israeli-Palestinian talks," the official said. The current stalemate is widely seen as "weakening the foundations for peace and strengthening Hamas," he added. The government is "hopeful" that the flurry of American diplomatic activity "will convince the Palestinians to resume talks." The same call came from a Foreign Ministry spokesman over the weekend, who said that "the start of negotiations is in the interest of both sides and should begin as soon as possible." Criticism of the Jewish state might be unfair as long as the Palestinians refuse to negotiate, the official suggested, saying that "Israel can't be responsible for the decisions of the Palestinian leadership. We are willing to negotiate without preconditions and we believe the Palestinians should make the right and courageous decision to join us around the table." Clinton's comments were seen by the Jordanians as an indication that the US would like to see the sides resolve the borders question, and potentially those regarding Jerusalem, before other issues, including refugees, security and water, to give the talks momentum but also to take advantage of the 10-month settlement moratorium announced by Prime Minister Binyamin Netanyahu in November. Israel, however, has been unenthusiastic about negotiating borders first. And the American view is that the concept is one of many that could be used to focus the party on final-status talks. The Americans met with both top Jordanian and Egyptian officials Friday to try to reinvigorate the Middle East peace process, with officials on all sides speaking of a new "atmosphere" to get talks off the ground. Several Arab officials have been pushing to resolve the borders first, and to use this as a means of helping President Authority President Mahmoud Abbas return to the table despite his insistence on a full freeze first, including in Jerusalem. "Because we got bogged down in heavy-duty discussions that got [us] nowhere with settlements over the last few months, we are at an impasse and what is needed right now is to bypass this impasse," a senior Arab official said. "You front-load borders in order to overcome this current obstacle over settlements." He added that Arab moderates completely support Abbas coming to the table immediately, though there isn't a total freeze. "He has our full backing to resume negotiations," the Arab official said. Clinton also spoke about support for the two sides, in the form of "guarantees and assistance" from the US and other outside parties. But she didn't speak of letters of guarantee, which media reports have suggested the US has been formulating to present to the two sides during the upcoming trip to the region by US Middle East envoy George Mitchell. She did, however, use a formulation that suggests the construction of a basis for the Terms of Reference that would shape negotiations in order to reassure each side that their key positions were recognized. "The United States believes that through good-faith negotiations the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps," she said, "and the Israeli goal of a Jewish state with secure and recognized borders that reflects subsequent developments and meet Israeli security requirements." The reference to the pre-June 5, 1967, lines is a key demand of Abbas's, and some hope that he could seize on such a formulation as an achievement that would obviate the need to focus on settlements, because those communities lie beyond those lines. Fatah Central Committee member and former security commander Muhammad Dahlan is optimistic that peace negotiations between the Palestinians and Israel will resume in the coming weeks, according to an interview with Al-Hayat published on Friday. Dahlan revealed that Egypt, Saudi Arabia, Jordan and the PA had been holding intense contacts with the Middle East Quartet to formulate a unified position regarding the resumption of peace talks. The PA hoped that Israel would accept the new proposal, Dahlan said. "We hope the struggle of chairman Abu Mazen [Abbas] against the previous negotiating mechanism will bear fruit already in the coming weeks," Dahlan was quoted as saying by the London-based newspaper. However, Dahlan went on to say that "the Palestinian people prefer to be cautious when it comes to Prime Minister Binyamin Netanyahu." He reiterated the PA's demand that Israel freeze all settlement construction before talks are renewed and warned that the situation could deteriorate quickly. "The current settlement [activity] in Jerusalem is aimed at taking [the Jerusalem issue] off the negotiating table," Dahlan said. "All we seek is a year or 10-month building freeze, during which a permanent agreement will be achieved." The PA will insist that the pre-'67 lines be the final borders of the future Palestinian state, he said, stressing that the Palestinians "will not accept any manipulation on this issue." Despite the clear demands the PA was prepared to reach a compromise to achieve a comprehensive peace deal, he said. "Each side is insisting on its demands, but we are prepared to make painful decisions. Any compromise will be at the expense of all sides," Dahlan told Al-Hayat. Top Palestinian negotiator Saeb Erekat also said Saturday that a complete stop to all settlement construction was required before any peace negotiations can resume. The PA "will continue our effort until the American administration will force Israel to renew negotiations based on its road map obligations and especially regarding ceasing construction in the settlements, including east Jerusalem," Erekat said. In an interview with Agence France-Press, he said the Palestinians hoped negotiations will resume from the point were they halted in December 2008, when the PA held talks with then-prime minister Ehud Olmert. "We want a clear recognition of the two-state solution and the 1967 borders," Erekat said. "You cannot have discussions on borders while the territory you want to set up your state on is being eaten up by the settlements," he said. Haviv Rettig Gur and Jerusalem Post staff contributed to this report.