The US does not accept Israel's position that it can continue some construction in West Bank settlements, and wants Israel to release more Palestinian prisoners than it plans to free before a high-stakes peace conference later this month, Israeli government officials say.
Israel maintains it can build to account for the "natural growth" of the existing settler population. And Israeli Prime Minister Ehud Olmert plans to ask Cabinet today to approve the release of 450 prisoners -- a far smaller number than the 2,000 the Palestinians want freed in a bid to shore up Palestinian President Mahmoud Abbas before the summit in Annapolis, Maryland.
The conference is meant to relaunch formal peace negotiations between the two sides after seven years of violence that still simmers. No date has been announced yet, as Israel and the Palestinians struggle to put together a joint document to be presented at the conference and serve as a blueprint for talks that are to begin after the gathering.
Aides close to Olmert traveled to Washington last week ahead of the meeting and reported the US positions to the prime minister on Saturday night.
The dispute over settlement construction is just one sign of the gaping divide between Israel and the Palestinians.
Ahead of the conference, Israel and the Palestinians recommitted to carry out initial obligations under the long-dormant, US-backed "road map" peace plan, which would require Israel to stop settlement construction and the Palestinians to disarm militants.
The Palestinians say they have taken serious action to disarm militants in the West Bank, where a government loyal to Abbas is in charge. Israel says they have to do more to rein in gunmen.
Israeli spokespeople have refused to discuss on the record whether Israel is prepared to cease settlement construction. But the Olmert aides who traveled to Washington reported that the US administration is displeased that Israel has not changed its position on "natural growth" construction -- even though it is explicitly banned under the road map, the Israeli government officials said.
On Saturday, Palestinian negotiator Saeb Erekat said he sent a letter to US consul general in Jerusalem, Jacob Walles, calling for Israel to halt all settlement construction in the West Bank.
"We don't want any games this time in terms of settlement construction," Erekat said.
The road map quickly foundered after it was accepted by both sides in 2003 because neither took concrete steps to fulfill their commitments.
Meanwhile, expectations for the Annapolis conference have dropped so much that the administration of US President George W. Bush is now stressing what will happen afterward to resuscitate peace negotiations.
But US State Department spokesman Sean McCormack last week insisted all is well.
"We are confident that all the preparations are well underway. They're on a good track," he said.
If the conference fulfills hopes, it will be the first time Palestinians and Israelis engage in full peace negotiations since Clinton tried to broker a final settlement toward the end of his presidency in 2000.