updated 11/10/2008 11:57:00 AM ET 2008-11-10T16:57:00

Israeli opposition leader Benjamin Netanyahu on Monday pledged to continue negotiations with the Palestinians if he wins February elections, backing away from earlier hints he would abandon U.S.-backed peace talks but giving no indication he'd be ready to make any significant concessions.

Netanyahu refuses to discuss the future of the disputed city of Jerusalem, one of the "core issues" that have been on the table in negotiations for the past year. On Sunday, international Mideast mediators reaffirmed this framework, even as Netanyahu's office said he did not. Netanyahu's position on other key issues also falls far short of Palestinian and international demands.

His statement that peace talks would "move forward" if he is elected prime minister appeared to be aimed at easing international concerns and sending a message to the Israeli electorate that he can get along with the rest of the world.

Emphasis on Palestinian economy
Speaking to reporters after meeting international peace envoy Tony Blair, Netanyahu said that if his hawkish Likud party returns to power, he would put a fresh emphasis on efforts to boost the ailing Palestinian economy but would not halt political talks.

"If we, as I believe, will form the next government, we will move both the political negotiations forward and the economic peace that we've been working on," Netanyahu said.

A day earlier, his office had said the talks inaugurated at an international conference in Annapolis, Maryland, last November had failed to make headway and there was no point continuing with them.

The talks call on Israel and the Palestinians to resolve all outstanding issues between them, including the conflicting claims to the holy city of Jerusalem and a final border between Israel and a future Palestinian state.

Netanyahu gave few details on his vision for peace. But in a recent speech to parliament, he said Israel would have to retain all of Jerusalem and large chunks of West Bank territory claimed by the Palestinians.

The Palestinians object to any interim agreements, and Netanyahu's tough stance on the core issues would make it all but impossible to reach a peace deal.

In the West Bank, Palestinian Foreign Minister Riad Malki said his government is ready to negotiate with any Israeli party "if this party is ready to start negotiations from the point where we left off." He said that if Netanyahu wins, "we want to test these statements ... to see if he is serious or just maneuvering."

Scandal behind early election
Polls currently place Likud and Foreign Minister Tzipi Livni's centrist Kadima neck and neck ahead of the Feb. 10 vote. Israel is holding the election, a year and a half ahead of schedule, because a corruption scandal is driving current Prime Minister Ehud Olmert from office.

Livni has been leading Israel's negotiations for the past year and has acknowledged that Israel will have to make tough concessions for peace.

At Sunday's international conference in Egypt, the outgoing Israeli government, the Palestinians and the "Quartet" of international peace negotiators said talks must continue after Bush leaves office in January. Blair represents the Quartet: the United States, the European Union, Russia and the United Nations.

The negotiations were originally envisaged as producing a peace agreement by the end of this year, but both sides have acknowledged that will not happen and there has so far been little evident success.

Blair did not speak to reporters after Monday's meeting with Netanyahu. In an interview with The Associated Press on Sunday, he acknowledged that some believe the political talks have failed, but stressed that negotiations must proceed.

"For the first time we have a political negotiation, which is comprehensive, discussing all the issues, including all the difficult issues," he said. "The task is to build on that foundation."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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