From THE JERUSALEM POST Jul. 8, 2009 by Herb Keinon and Gil Hoffman:
Israel and the US are moving toward a compromise solution on the settlement issue that might allow both sides to claim "victory..." ...
According to senior government officials, under this type of solution, Israel would declare a moratorium of a few months on the settlement issue, possibly half a year, while the US would give Israel a green light to complete a still-to-be-determined number of housing units in the settlements that are in advanced stages of construction.
...Under this type of arrangement, US President Barack Obama would be able to claim a victory in getting Israel to agree to a moratorium on any new housing starts in the settlements, while Prime Minister Binyamin Netanyahu could claim that he did not agree to a complete freeze, and that housing construction would continue.
In addition, US Mideast envoy George Mitchell would continue efforts to extract normalization gestures from at least some countries in the Arab world.
...Once agreement is reached on the settlement issue, and the US gets some gestures from the Arab world, the next step would possibly be an event - likely an international conference - where a "to do" list would be presented regarding what needed to be done to move the diplomatic process forward.
This "to do" list, according to one well-placed source, was shaping up as a revamped edition of the road map, with sequential phases and a stronger regional component, meaning that the Arab states would be asked to become involved in the normalization of ties in the early stages, rather than at the end, of the process.
In addition, any new road map would have take into consideration - and deal with in detail - something that did not exist when the original road map was launched in 2003: Hamas control of the Gaza Strip.
Diplomatic sources said that the US, interested in shoring up its relations with Russia, is now much more amenable than in the past to the idea of an international conference in Moscow to launch the new initiative.
The sources said the issue was discussed during Obama's recent visit to Moscow, and that it will also be raised at the G8 meeting that opened Wednesday in Italy.
According to National Security Adviser Uzi Arad, speaking at a Knesset press conference marking Netanyahu's 100th day in office, Netanyahu expects Obama to honor the agreements reached with the Bush administration on West Bank construction....
...Netanyahu's policy planning director Ron Dermer vowed at the press conference that no compromises would be made on Israel's insistence that a Palestinian state be demilitarized. He promised that the prime minister would never utter the words "Palestinian state" without the word "demilitarized" preceding them....