The United States launched a frantic bid to avert the collapse of Middle East talks ahead of a deadline Sunday, but Palestinian leader Mahmud Abbas said Israel must choose between settlements and peace.
Abbas, who has threatened to quit US-organized negotiations unless Israel extends a moratorium on housing for settlers in the occupied territories, condemned "the mentality of expansion and domination" that he said controls Israel's policies.
The Palestinian leader met US Middle East envoy George Mitchell at a New York hotel before talks with other Arab leaders and then leaving the United States without any sign of a deal.
The US administration also held talks with Israeli leaders, according to US officials.
"We remain engaged with both sides," Crowley added later after Abbas had flown out.
|Israeli soldiers stand near construction machinery in the Jewish settlement of Adom, close to the Israeli-occupied West Bank city of Ramallah|
Israel's freeze on building new settlements in the West Bank expires at midnight on Sunday. The Israeli government has rejected strong international calls to completely halt settlement construction.
A Palestinian spokesman said the United States had vowed to keep up the talks until the last moment.
Abbas met US Secretary of State Hillary Clinton in New York on Friday night. Israel's Defense Minister Ehud Barak and Yitzhak Molcho, Prime Minister Benjamin Netanyahu's point man on the peace talks, were also in New York to aid compromise efforts, Israeli radio reported.
A senior Israeli official said Friday that "there cannot be zero construction" in the West Bank. The official said Israel was willing to cut a compromise deal.
But Abbas has rejected any compromise that does not guarantee a "complete halt" to settlement activity including in Jerusalem, a top aide, Nabil Abu Rudeina, told AFP.
In a speech to the UN General Assembly, the Palestinian leader praised Obama's efforts to bring Israelis and Palestinians together and declared his "complete readiness to cooperate with the American efforts for the success of the political process."
He said Palestinians face "dangerous problems that continue to push them into the corner of violence and conflict, wasting chance after chance to seriously address the issues faced by the people of the region and to attain comprehensive and genuine solutions.
"This is the result of the mentality of expansion and domination, which still controls the ideology and policies of Israel."
Abbas added that Palestinians still want peace and declared: "Our wounded hands are still able to carry the olive branch from the rubble of the trees that the occupation uproots every day."
The deadline for the freeze to end is widely accepted as Sunday, 10 months and a day after an original Israeli cabinet decision expires. A military order on the moratorium states it will only close on October 1.
Jeffrey Feltman, assistant secretary of state for Near East affairs, echoed a toughening US line toward the two sides.
"We are urging Israel to extend the moratorium," Feltman said. "We also are making clear to the Palestinians we do not believe that it is in their interest to walk out of the talks."
Obama restated demands for the moratorium to be extended and issued a strong call at the General Assembly on Thursday for the world to back his peace drive.
US officials have suggested a three-month extension to the moratorium, during which time Israel and the Palestinians could agree on borders, potentially neutralizing the settlements dispute, a senior Palestinian official said.
The international community considers Jewish settlements in the West Bank, including annexed east Jerusalem, to be illegal.
Some 500,000 Israelis live in more than 120 settlements across the West Bank and east Jerusalem.
Previous direct negotiations collapsed when Israel launched a military offensive on the Hamas-run Gaza Strip in December 2008, aimed at halting rocket and mortar attacks.
Highlighting challenges to the new process, a rocket fired from Gaza slammed into southern Israel on Saturday, without causing casualties, according to an army spokeswoman.