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Source: http://www.washingtonpost.com/wp-dyn/content/article/2009/08/27/AR2009082703473.html
U.S.: Settlements No Precondition on Mideast Talks
[AP/Washington Post] Matthew Lee - The Obama administration appears to be backing down on its insistence that Israel halt all settlement activity as a condition for restarting peace talks with the Palestinians. U.S. officials are now hinting that a less blanket moratorium would be acceptable provided the Palestinians and Arab states agree. State Department spokesman P.J. Crowley said Thursday: "We put forward our ideas, publicly and privately, about what it will take for negotiations to be restarted, but ultimately it'll be up to the parties themselves, with our help, to determine whether that threshold has been met." Crowley and other U.S. officials denied Israeli media reports that Mideast envoy George Mitchell had agreed to leave East Jerusalem out of the agreement and settle for a nine- to 12-month freeze in the West Bank only that would also allow the completion of projects already under construction. However, diplomats familiar with the talks say that the administration has signaled it might be able to accept an "understanding" on East Jerusalem that would entail an Israeli promise not to take "any provocative actions" there.