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US admits defeat on Israeli settlement freeze. Can it still broker peace?

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US-Israel talks on a three-month extension of the moratorium seemed close to conclusion several weeks ago, but the sides haggled over a package of incentives including $3 billion in military hardware to help Prime Minister Netanyahu sell it to his coalition.

The official declaration yesterday that no such moratorium would be forthcoming has left the Palestinians, which have yet to respond publicly, mulling their options. A prime consideration, suggested a top aide to Mr. Abbas, was whether the US could deliver meaningful results for the Palestinian Authority.

"We will assess if the US would be able ... to achieve success in its upcoming efforts," Yasser Abed Rabbo was quoted as saying on the Voice of Palestine radio station.

"The one who couldn't make Israel limit its settlement activities in order to conduct serious negotiations, how can he be able to make Israel accept a fair solution," he added. "This is the big question now."

Unilateral declaration of statehood?

The Palestinians, meanwhile, are considering a unilateral declaration of statehood, perhaps by requesting resolutions from the United Nations General Assembly or Security Council.

Resolutions from individual countries, though symbolic, are seen as a step in that direction. In addition to a letter of recognition from Uruguay early next year, Palestinians are hoping to win recognition from additional South American countries including Chile, Paraguay, and Peru, said a Palestinian official involved in the effort.

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