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OPT: Netanyahu says interim deal possible if talks fail

  • Netanyahu for first time says could be alternative path

* Abbas rejects interim deal

(Adds U.S. State Department comment, paragraph 8)

By Ori Lewis

JERUSALEM, Dec 27 (Reuters) - An interim Israeli-Palestinian peace deal could result from failure to reach agreement on major core issues, Israeli Prime Minister Benjamin Netanyahu said on Monday, the first time he has mentioned such an option.

When asked about Israeli Foreign Minister Avigdor Lieberman's comment that the best option could be a long-term interim pact because a permanent deal was not possible, Netanyahu said:

"If ... we perhaps reach a (dead end) on Jerusalem and perhaps (a dead end) on refugees, then possibly the outcome could be an interim agreement. It is possible, I cannot rule it out," Netanyahu said in an interview in Hebrew on Israel's Channel 10 television.

It was the first time Netanyahu said there could be an alternative path in peace talks to the U.S.-brokered negotiations that stalled after Israel refused to extend a partial West Bank building freeze on Sept. 26, although he declined to discuss details of such a move.

A spokesman for Palestinian President Mahmoud Abbas rejected outright the possibility of an interim peace deal saying the matter of Jerusalem and refugees had to be resolved and could not be deferred to a later date.

"This is unacceptable to us, because it would exclude two vital issues, Jerusalem and the refugees. Jerusalem is a red line as it is to be the capital of a future Palestinian state ... going back to talk about a state without determining its borders is unacceptable, and it will not lead us to a true peace," Abbas aide Nabil Abu Rdaineh said.

U.S. EFFORTS CONTINUING

In Washington, a U.S. State Department spokesman said the United States was working hard to reach a peace deal.

"Our position is clear: we remain hard at work with the parties to achieve a framework agreement on all the core issues," spokesman Mark Toner said when asked about Netanyahu's comments.

Netanyahu said he recognised that the Palestinians would not agree to enter talks over an interim agreement but that it might be where the talks would end up.

"If ahead of time we will tell (the Palestinians) let's (work on an interim deal) it is not certain that they will agree so easily, but it could be the outcome of a diplomatic initiative," Netanyahu said.

Netanyahu said in the event the Palestinians agreed to recognise Israel as a Jewish state he would be willing to jeopardise coalition agreements to pursue a peace deal.

"If the Palestinians will recognise a Jewish state ... I tell you here and now I will go all the way with this, no coalitional consideration will stop me ... Not in reaching the agreement and not in presenting it to the people and the majority of the people will support me," he said.