By STEVEN GUTKIN
The Associated Press
Wednesday, December 12, 2007; 1:59 PM
JERUSALEM -- A Palestinian rocket barrage, an Israeli army incursion in Gaza and a fresh land dispute in Jerusalem marred the first Israeli-Palestinian peace talks in seven years Wednesday.
Instead of building on the momentum of last month's high-profile peace conference in the U.S., the two sides traded barbs and accusations _ and wrapped up a 90-minute session without any achievements.
An Israeli official described the atmosphere as "tense," and a Palestinian official reported "not an inch" of progress.
Israel had hoped to use the meeting to establish a framework for discussions to further both sides' stated goal of signing a peace deal by the end of 2008. The fact that the session instead turned into a heated airing of mutual grievances showed just how far Israelis and Palestinians have to go before ending their 6-decade-old conflict.
It was the first formal negotiating session since Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas relaunched peace talks at last month's Mideast conference in Annapolis, Md. The last round of talks broke down in January 2001, three months after Palestinian-Israeli violence erupted.
At the heart of Wednesday's tension was an Israeli announcement last week that it would build 307 new homes in the Har Homa neighborhood of Jerusalem, in an area the Palestinians claim as their future capital. Palestinian negotiator Saeb Erekat said his delegation expressed "outrage."
"We are coming to negotiate over Jerusalem and borders, and the dictation and facts on the ground continue," he said. "If you want to restore the credibility of the peace process, the Israeli government must revoke this order."
Also tarnishing the talks was fresh violence between Israel and militants in Gaza, where the Islamic Hamas seized power six months ago. On Wednesday, Palestinian militants fired more than 20 homemade rockets into Israel, causing damage to structures and slightly wounding one woman. The barrage came hours after Israeli forces ended an incursion into the coastal strip that killed six militants and left a wide swath of damage.
Initially scheduled to kick off with a ceremonial launch at Jerusalem's ornate King David hotel, Wednesday's talks were held secretly at another hotel in the city. Negotiators sped away from the meeting without commenting to reporters, who discovered the location after the talks had begun.
Coffee and tea were served, but neither side described any great warmth among the participants. The Palestinians complained about Har Homa and the Gaza incursion, and Israeli Foreign Minister Tzipi Livni protested the Gaza rockets and the involvement of Palestinian policemen in the Dec. 3 killing of an Israeli settler in the West Bank.
But the two sides agreed to continue talking in the coming weeks, and Israel reiterated its commitment to the negotiations.
"I can assure you that Israel is ready to move forward with the Palestinians for a historic compromise. We want that solution, Israel and Palestine, two states for two peoples living side by side in peace," said Mark Regev, the prime minister's spokesman.
Former Israeli peace negotiator Eytan Bentsur said fireworks are not surprising at the beginning of talks.
"There is an oversensitivity, and the reaction is to defend one's own side. It takes time, they have to calm down and show up and eventually ... there will be a negotiation," he said.
After Hamas seized Gaza in June, Israel decided to renew peacemaking with the moderate Abbas, whose forces now control the West Bank.
The stakes for both sides are exceedingly high. Failure to reach a deal could eventually mean the end of Israel as a democratic Jewish state if it continues to control Palestinian areas, because the high Palestinian birth rate has already led to a roughly equal number of Muslims and Jews in the lands comprising historic Palestine.
And moderate Palestinians stand to lose their life-or-death struggle against Islamic radicals if peace efforts fail.
Hamas is betting on failure, and the group's spokesman in Gaza, Sami Abu Zuhri, called on Abbas' government "to immediately stop these absurd negotiations" with Israel.
"This is taking lightly the blood of the martyrs and encouraging Israel to continue with its crimes," he said.
With so much riding on the talks _ which have also become a cornerstone of the Bush administration's foreign policy _ Israel's decision to build the homes in Har Homa has drawn widespread criticism, including a rare rebuke from Secretary of State Condoleezza Rice.
On Wednesday, the incoming U.N. Mideast envoy, Robert Serry, joined the criticism, calling the planned construction "unhelpful and contrary to international law."
Israel insists the building is legal because it is taking place in Jerusalem's municipal boundaries, which were expanded to include the city's eastern sector after Israel captured it in the 1967 Mideast war. That annexation was never recognized by the international community.
The construction in Har Homa could help Olmert quiet hawkish members of his coalition as he pushes forward with other concessions. Israeli officials say they expect Har Homa, like all Jewish neighborhoods in east Jerusalem, to remain in Israeli hands under a final peace deal.
One of the biggest obstacles to such an accord is Gaza, where Abbas' forces currently wield no influence.
After the latest violence Wednesday, Olmert convened his so-called security Cabinet, where top political and defense officials decided to continue the policy of brief incursions into Gaza rather than launching a broad invasion.
But no one knows how long the restraint will last, and plans are in place for a major operation.
"This reality cannot continue," Israeli military chief Lt. Gen. Gabi Ashkenazi told Army radio. "It could be that we will reach the point where we will have to do the big operation."
The mayor of Sderot, the small town in southern Israel that has absorbed most of the rocket attacks from Gaza, announced Wednesday that he's stepping down. Eli Moyal said the situation in the town is "impossible."
Associated Press writers Karin Laub, Steve Weizman, Sarah El Deeb and Rory Kress contributed to this report.