Abbas cool to unilateral independence

"But if we cannot achieve that, and we reach a deadlock, we will go back to our Arab nation to take the necessary decision at the highest level," he said, without mentioning any options. Earlier, aide Yasser Abed Rabbo said Palestinians should declare independence unilaterally "if things are not going in the direction of (Israel) actually halting settlement activities, if things are not going in the direction of continuous and serious negotiations." The peace talks, which Washington hopes will yield a statehood deal this year, have been stalled by disputes over Israeli plans to build new homes on occupied land and Olmert's insistence on putting off talks about the future of Jerusalem.

Abbas's authority has also been limited to the occupied West Bank since Hamas, who oppose his peace efforts with Israel, seized the Gaza Strip in June. A Hamas spokesman said Abed Rabbo's suggestion was not worth listening to.

"Our Palestinian people are not in need of more failed experiences from some failed people," said Sami Abu Zuhri. In a move that could further anger Palestinians, Israeli anti-settlement group Peace Now said on Wednesday right-wing activists had placed 27 caravans in the West Bank despite a pledge by Olmert at Annapolis to halt settlement activity. Peace Now said activists were circumventing a ban on new settlement construction by putting the caravans on a site near the Eli settlement north of the West Bank town of Ramallah. "Olmert talked about a settlement freeze at Annapolis but it's all blah blah because we see construction all over the West Bank," said Hagit Ofran, head of monitoring at Peace Now.

Olmert and Abbas agreed at Annapolis to abide by a 2003 US peace "road map" which requires Israel to halt settlement activity and the Palestinians to rein in militants. Each side accuses the other of failing to meet those commitments.