Palestinian Authority President Mahmoud Abbas reiterated on Sunday his refusal to resume peace talks with Israel unless Binyamin Netanyahu's government accepted the two-state solution and agreed to freeze all construction in the settlements in the West Bank. Abbas's remarks came in response to an appeal from Netanyahu made during the Sunday cabinet meeting in which the Israeli prime minister called for the two leaders to revive the stalled peace process. Abbas was speaking to reporters in Ramallah after meeting with visiting Romanian President Traian Basescu. "Israel must recognize the two-state solution and stop all settlement activities in order to resume peace talks over final status issues," Abbas said. "The final status issues are settlements, Jerusalem, borders, refugees, water, security and prisoners." Abbas said that both the Palestinians and the Israelis were required to fulfill their obligations in accordance with the road map plan for peace in the Middle East. "We care very much about the peace process," he added. "We are demanding that Israel fulfill its commitments under the terms of the road map, first and foremost recognizing the two-state solution and halting settlement construction." He said that only then would the way be paved for the resumption of the negotiations with Israel over the final status issues. Chief Palestinian negotiator Saeb Erekat said that the PA would not make any compromises regarding settlements. "There can be no half-solutions with regards to the settlements, including so-called natural growth there," he said, referring to unconfirmed reports that the US and Israel have reached agreement on building new homes in some of the settlements. Erekat said that the continued construction in the settlements would sabotage the international community's efforts to persuade the Palestinians and Israelis to resume peace talks in the near future. He said that Abbas sent a message to the US administration over the weekend reiterating his stance on the settlements and making clear that the Palestinians would not compromise regarding this issue. "If the US administration can't force Israel to stop the settlements, how will it force Israel to abide by any agreement regarding final status issues such as Jerusalem, borders, refugees, water, security and settlements?" The cabinet meeting was held in Beersheba Sunday, just over 30 years after the May 1979 meeting of former prime minister Menachem Begin and former Egyptian president Anwar Sadat. "Let's make peace, both diplomatic and economic," Netanyahu said at the start of the meeting, which was also meant as an act of solidarity with the Negev city. "There is no reason why we can't meet anywhere in Israel," he said of himself and Abbas, "and since we are in Beersheba, I say, let's meet here." Netanyahu stressed the Palestinians' "basic right to live in peace, security and prosperity," and said the government had "made great efforts in recent weeks to ease their lives. We've removed many roadblocks; we decided to increase the operating hours of the Allenby Bridge for more goods; and I've decided to advance a series of projects with the Palestinians to promote peace. But all these efforts can only bring us to a certain point, and the results will be multiplied a dozen-fold if there is cooperation from the other side." The prime minister called "on the leaders of the Palestinians and the Arab states: Let's meet and cooperate. We can bring many players on board." Later in the day, at a ceremony on Mount Herzl marking 105 years since the death of the founder of political Zionism, Theodor Herzl, Netanyahu insisted the Palestinians "must abandon their demand to settle the descendents of Palestinian refugees in Israel and gradually 'eat away' at the State of Israel after a peace agreement is signed." The Palestinian Authority leadership has refused to relinquish this demand while successive Israeli governments have rejected it outright. At the cabinet meeting, Netanyahu also announced the resumption of planning work for construction of an Eilat-Beersheba train line that would connect Israel's southernmost city to the country's center, thereby creating a rail link between the Mediterranean and the Red Sea. He said the line would be a "trade route between Asia and Europe and will open the entire South for [Israeli] travelers." Ministers used the meeting to discuss infrastructure projects in Beersheba and the South. Jerusalem Post staff contributed to this report.