Senior Israeli and Palestinian officials have held talks ahead of a planned Palestinian bid for statehood at the United Nations, as top diplomats from the United States and Europe push to avert a showdown that could crush already dim Mideast peace prospects.
Palestinian Prime Minister Salam Fayyad met Sunday in New York with Israeli Defense Minister Ehud Barak. The French News Agency quoted Fayyad as saying the two officials discussed security issues and the Palestinian Authority's readiness to govern.
The World Bank, International Monetary Fund and United Nations have all said the Palestinian Authority - which governs the West Bank - is capable of running its own state.
U.S. Secretary of State Hillary Clinton said she discussed "the way forward" in efforts to bring Israel and the Palestinians back to direct negotiations during a meeting Sunday with EU foreign policy chief Catherine Ashton. But Clinton declined to reveal if mediators are making progress.
A group of key donors to the Palestinian Authority also called for a resumption of peace talks after holding a meeting Sunday. Israeli Deputy Foreign Minister Danny Ayalon told the committee that future economic aid from Israel could be "severely and irreparably" compromised if Palestinians continue with the planned U.N. bid.
Palestinian President Mahmoud Abbas has said he will seek full U.N. membership for an independent Palestinian state later this week, despite strong U.S. and Israeli opposition.
The Palestinian government relies on foreign donors to help make up its yearly budget, which the IMF says is facing a $300 million shortfall for this year. The Palestinian Authority also receives tax and customs revenue that Israel collects on its behalf.
Senior envoys from the Mideast Quartet - the U.S., EU, U.N. and Russia - also met in New York Sunday.
Former British prime minister Tony Blair - who serves as a Quart envoy - said Sunday that mediators will be looking for a way that allows Palestinians' "legitimate aspirations" to be recognized while renewing talks with Israel. He told ABC News that direct Palestinian-Israeli negotiations are "the only thing that will produce a state."
Abbas said in Ramallah Friday that U.N. membership is a legitimate right for Palestinian people. But Israeli Prime Minister Benjamin Netanyahus, in talks with his Cabinet Sunday, predicted the Palestinians' U.N. statehood bid will fail.
The U.S. says it will use its veto on the U.N. Security Council against a Palestinian application for full statehood.
Even with a loss in the Security Council, the Palestinians are expected to take their case to the 193-member General Assembly, where a simple majority could grant a more symbolic recognition. The Palestinians currently hold observer status at the United Nations.
U.S.-mediated peace talks between Israel and the Palestinians stalled a year ago, after an Israeli moratorium on West Bank settlement construction expired. Palestinians oppose construction on land they want as part of a future state.
Abbas has said a Palestinian state must have the borders in place before Israel took control of the West Bank and Gaza Strip in the 1967 Arab-Israeli war.
American envoys have been shuttling between Israeli and Palestinian leaders in an attempt to revive direct talks and forestall the Palestinian statehood bid.
U.S. President Barack Obama is expected to meet with Netanyahu when both are at the U.N. General Assembly this week.
Some information for this report was provided by AP and AFP.