Talks between Israel and the Palestinians have not yet begun, and already Palestinian Authority President Mahmoud Abbas is threatening to stop them.In a letter sent Sunday to the Quartet – the US, the EU, the UN and Russia – Abbas warned that if construction continues anywhere beyond the Green Line, he will pull out of negotiations. “Settlements and peace are parallels that don’t meet,” Abbas wrote. “If Israel continues with settlement construction, we will withdraw from talks.”The PA president’s letter is clearly a response to the severe criticism directed at him by Palestinian political and organizational figures for agreeing to return to direct talks without preconditions. But it also highlights a major political dilemma that Prime Minister Binyamin Netanyahu will be forced to face very soon.It would be political suicide for Netanyahu to agree to maintain the “once-only” 10-month new-construction freeze he instituted throughout Judea and Samaria last November, not to mention extending it to Jewish neighborhoods in parts of east Jerusalem annexed after the Six Day War, as the Palestinians demand. It would also send out the false message that Israel might be ready to evacuate all Jewish settlements beyond the 1949 Armistice lines.Deputy Premier Dan Meridor’s suggestion to limit the freeze to areas located outside Jerusalem and outside the major settlement blocs Israel intends to retain via land swaps under a permanent accord – Ariel, Ma’aleh Adumim and the Etzion settlements – has a much better chance of receiving broad support, and is much more realistic.Except Abbas has now made clear that it won’t be sufficient.THE PRESENT building freeze has hit settlers hard. Most of the 492 housing unit “violations” of the freeze, as documented by Peace Now, were in consensus cities such as the haredi Modi’in Illit, which had 180 such violations. This town of 45,000, which has the highest fertility rate in the country, is located just across the Green Line. Additional violations were in the Jerusalem suburb of Givat Ze’ev (40), and in Ariel (22), Ma’aleh Adumim (21) and Kfar Etzion (20), which are all expected to be annexed under any future two-state solution.These exceptions have done little to alleviate the major “natural growth” housing shortage at many settlements.At the beginning of the year 301,200 Jews lived in Judea and Samaria, according to the Central Bureau of Statistics, about two-thirds of them in the large settlement blocs.And population growth there is running at a brisk annual rate of 5 percent, over double Israel’s general population growth rate of 1.8%.Young families living in cramped conditions are anxiously waiting for the freeze to end so they can build homes, while veteran settlers want to expand existing homes to accommodate their growing families. And this is happening at a time when Israel proper, within the Green Line, is experiencing a major housing shortage of its own.Ruling throughout the West Bank, which is populated by well over two million Palestinians, is not an Israeli interest. The demographic threat to a Jewish majority is obvious. And Israel has no desire to police a population that bitterly views itself as occupied.Over four decades have transpired since Israel, pre-empting an attack by the combined armies of the Arab world in the Six Day War, ended up controlling territory, previously held by Jordan, that had enormous Jewish historical significance.During this time, certain “facts on the ground” have been created in Jerusalem and the large settlement blocs, while the Palestinian strategic response to Israel’s presence has ranged from stubborn intransigence to murderous resistance. Now, after 18 months of energetic US diplomacy, the Palestinian leader who claimed prime minister Ehud Olmert’s generous peace offer left gaps that were “too wide,” is finally being dragged back to talks aimed at the ostensibly shared goal of a peaceful two-state solution.ABBAS PURPORTS to be ready for the kind of territorial swaps that would help facilitate an accord by formalizing the integration of the settlement blocs into Israel, along with the Jewish east Jerusalem neighborhoods where Israel already claims sovereignty. Yet the PA president’s demand for a blanket building moratorium that makes no distinctions between such territories and other, isolated settlements indicates ongoing intransigence.Abbas has already frittered away nine months of the building freeze – an unprecedentedly encouraging context for a genuine attempt at peacemaking. Now he is vowing to walk away if the freeze is not merely maintained, but expanded – to the very areas Israel reasonably insists on retaining.It’s hardly an optimistic harbinger for the talks ahead.