Ammon News - AMMONNEWS - Israel’s chief peace negotiator said in an interview on Sunday that she was optimistic about the Mideast peace talks but showed growing frustration over a hardline faction in Prime Minister Benjamin Netanyahu’s increasingly unwieldy coalition government which she said are undermining her efforts.

“There are people in the government who don’t want peace,” the Associated Press quoted Netanyahu’s chief negotiator, Tzipi Livni as telling the Ynet website.

She said the hardline “Jewish Home,” a pro-settler party was trying to thwart her efforts. She took special aim at the party’s leader, Naftali Bennett, and Housing Minister Uri Ariel, a strong supporter of Jewish settlements.

She said: “Bennett and Uri Ariel represent those who want to prevent a peace process.”

Netanyahu’s coalition is dominated by hardliners who oppose making significant concessions or reject the establishment of an independent Palestinian state.

The hardline stance was demonstrated when Israel allowed more Jewish settlers to own properties in Palestinian territories.

Israeli Defense Minister Moshe Yaalon on Sunday approved the return of Jewish settlers to a contested house in the flashpoint West Bank city of Hebron, his office said.

The Supreme Court ruled last month that settlers were the lawful owners of the building in the heart of the occupied Palestinian city, ending a legal dispute that had lasted nearly seven years.

But Livni, who is also Israel’s justice minister, lamented the sidetracked progress.

“I believe we are close enough that decisions on both sides will be made, with American encouragement, to continue the talks,” she said.

Unlike Livni, Israel’s Foreign Minister Avigdor Lieberman, in a meeting with ambassadors posted in Tel Aviv on Sunday, blamed the Palestinians for the rapid deterioration of the peace process, Agence France-Presse reported.

“We were very close to an agreement with the Palestinians, a complex transaction which was being examined by the [Israeli] cabinet, but at the last moment the Palestinians broke their promises and submitted applications” to join international treaties, he charged.

“We are ready to discuss and negotiate but we will not accept unilateral steps,” Lieberman said.

Meanwhile, in an effort to salvage peace talks, Israeli and Palestinian negotiators met on Sunday, a Palestinian official told AFP.

Chief Palestinian negotiator Saeb Erakat met in Jerusalem with his Israeli counterpart, Livni, and Netanyahu’s special envoy Yitzhak Molcho, he told AFP.

There was no immediate word from the Israeli side, which will observe the seven-day Jewish holidays of Passover from sunset on Monday.

A Palestinian source close to the talks said a new meeting between the negotiators was set for Tuesday or Wednesday evening, with U.S. envoy Martin Indyk due to attend.

Indyk, who presided over a meeting last Thursday, has since returned to Washington for consultations but is due to return this week, the source added.

The peace process suffered a new blow last week when Israel said it would freeze the transfer of duties it collects on the Palestinians’ behalf, in retaliation for their diplomatic moves at the United Nations.

The monthly 80 million euros ($111 million) in taxes collected by Israel represents about two-thirds of the Palestinian Authority’s income.

Israel also reportedly plans to suspend its participation with the Palestinians in developing a gas field off the Gaza Strip and plans to put a cap on Palestinian deposits in its banks.

*Agencies