Nov 22, 2009
CAIRO (Reuters) - Israel's president said on Sunday expanding Jewish settlements in the West Bank was a "marginal" issue blocking resumption of peace talks with the Palestinians.

But Egyptian President Hosni Mubarak, speaking at a joint news conference with Shimon Peres, said Israeli construction work on land captured in a 1967 war should stop and that Israel should take "courageous decisions" to push forward peace.

Egypt and other Arabs have blamed the United States for not doing enough to press Israel to stop settlement building work. Prime Minister Benjamin Nethanyahu says Israel must accommodate the "natural growth" of Jewish families in settlements.

"The minute we shall start to negotiate there won't be new settlements, there won't be confiscation of land," Peres said on a visit to Egypt, the first Arab state to sign a peace treaty with Israel and which plays a mediation role in the conflict.

Palestinian President Mahmoud Abbas has said he would not renew negotiations with Israel unless it agreed to freeze settlement expansion. He has urged Washington to do more.

U.S. President Barack Obama has said Israel's approval of new construction was "very dangerous" because it would fuel Palestinian anger and threatened peace. But he has backed Israel's position that stopping should not be a condition for talks.

Peres, whose post is largely ceremonial, said the settlements issue was being blown out of proportion.

"Unfortunately, it's a marginal issue, it is some building of houses that became a central issue for the wrong reasons. My answer is even this issue can be settled by negotiations and agreement," Peres said, calling for a swift restart to talks.