Palestinian Authority President Mahmoud Abbas on Monday told visiting US Secretary of Defense Leon Panetta that the Palestinians are prepared to return to the negotiating table if Israel stopped construction in the settlements and accepted the pre-1967 lines as the basis for a two-state solution.Chief PLO negotiator Saeb Erekat, who attended the meeting in Ramallah between Abbas and the US secretary of defense, said that Panetta carried “clear messages” to the Palestinians.RELATED:Erekat: US cannot use aid as blackmail against the PA PA ministers say US hasn't confirmed it's cutting aidErekat said that Panetta affirmed US President Barack Obama’s commitment to the two-state solution.Erekat quoted Panetta as saying that Obama considers the establishment of a Palestinian state as a Palestinian, Israeli and American interest.“The US Secretary of Defense said that the US sees that the most appropriate way is the resumption of the peace talks and the recent Quartet proposal provides a mechanism for this,” Erekat told the Bethlehem-based Ma’an news agency.According to Erekat, Panetta also told the PA leadership that Washington was making big efforts to change Congress’s decision to suspend financial aid to the Palestinians. Abbas, for his part, told Panetta that he agrees to the Quartet proposal, but Netanyahu should assume responsibility and accept it, Erekat added.Erekat said that the moment the construction in the settlements stops the PA would return to the negotiations.Meanwhile, Nimer Hammad, a top advisor to Abbas, reiterated the Palestinians's refusal to recognize Israel as a Jewish state.He said that if US financial aid to the Palestinians was conditioned on recognition of Israel as a Jewish state, "we won't do so at all."Mohammed Shtayyeh, member of the Fatah Central Committee and a close aide to Abbas, said that the Arab and Islamic countries have expressed readiness to compensate the Palestinians for the loss of Western aid.He said that since the establishment of the PA in 1994, the US has given the PA a total of $2.4 billion - $150 million a year.In addition, the Americans have given the Palestinians another $1 billion in aid through non-governmental organizations during the same period, he added.Shtayyeh said that the current crisis facing USAID was the result of Congress's delay in approving additional funds to the American organization, which has been funding various infrastructure projects in the Palestinian territories. Shtayyeh added that the US Administration was not bound by Congress's decisions and could "bypass" the legislator as was the case in 2006. Then, Congress decided to suspend financial aid after the formation of a Fatah-Hamas unity government.According to Shtayyeh, Catherine Ashton, the EU's chief foreign policy representative, has assured Abbas that the EU would seek to fulfill all its financial obligations to the Palestinians.He quoted Ashton as saying that the EU would not link the aid to the PA leadership's decision to apply for full membership in the UN.