updated 9/20/2009 4:33:20 PM ET 2009-09-20T20:33:20

Barack Obama will try to get Mideast peacemaking back on track this week in a meeting with the Israeli and Palestinian leaders, hoping the weight of the U.S. presidency can resolve a showdown over Israeli settlement construction and get the sides talking again after months of deadlock.

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For Obama, it's high-stakes diplomacy that relies on resolving the Israeli-Palestinian conflict as key to cracking other world problems. He'll be bringing Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas together in New York on Tuesday for their first encounter since Netanyahu took office in March.

Obama faces a tough task. The Israelis and Palestinians have dug in deep to positions that have eluded compromise, despite multiple visits by Washington's special U.S. envoy. Deep divisions among the Palestinians further complicate the process. And it's far from clear whether there is enough common ground between the hawkish Netanyahu and the weakened Abbas.

The Palestinians hope to build a state in the West Bank and Gaza Strip, with east Jerusalem as its capital. Israel captured those territories in 1967. While Israel pulled out of Gaza in 2005, Netanyahu has given little indication that he is ready to make territorial compromises in the West Bank and east Jerusalem that would be crucial to reaching an accord.

Groundwork for negotiations
After the meeting was announced Saturday, Netanyahu's office said he "warmly accepts" the invitation. A senior Israeli official said the meetings in New York were meant to lay the groundwork for negotiations but would not constitute a relaunch of talks.

He spoke on condition of anonymity because he was not authorized to articulate government policy on the record. Palestinian officials were traveling to New York on Sunday and could not immediately be reached for comment.

An administration official has said there would be no announcement after the meeting, and it's not clear what progress it might achieve toward renewing talks.

Talks on the Palestinian side are being handled by Abbas and his moderate Palestinian Authority. The Islamic militant Hamas group that overran Gaza in 2007 is not a party to the negotiation process.

In Gaza on Sunday, Hamas Prime Minister Ismail Haniyeh castigated the new U.S. administration and said he wouldn't recognize any accord.

"Any signature will be invalid, and it won't bind the Palestinian people to anything," he said in a sermon in Gaza City at the start of the Muslim Eid al-Fitr holiday.

Obama is eager to mend relations with the Muslim world, which frayed badly over the Sept. 11, 2001, terror attacks and the U.S.-led wars in Iraq and Afghanistan. He knows Washington's close alliance with Israel goes to the heart of Muslim anger toward the West.

With this in mind, Obama has put heavy pressure on Israel to halt construction of settlements in the West Bank and east Jerusalem. Netanyahu has said he will slow construction, but refused to accept an absolute freeze.

Credibility could suffer
While the tough stance toward Israel has been welcomed in the Arab world, it also appears to have raised Palestinian expectations. Should Obama fail to wring significant concessions from Israel, his credibility could suffer among Muslims and Arabs.

His public spat with Israel over the settlements has also strained relations with the Jewish state, where many wonder whether Obama is as committed to their safety as previous U.S. leaders were.

Bolstered by Washington's stance, the Palestinians are showing new resolve on opposing settlement construction. Abbas has refused to begin negotiations without a settlement construction freeze.

Abbas lost credibility among Palestinians after the latest round of peace talks with former Israeli Prime Minister Ehud Olmert broke down last winter following Israel's bruising offensive against Hamas in Gaza.

Obama plans to meet separately with Netanyahu and Abbas on the sidelines of the U.N. General Assembly before bringing them together Tuesday for a three-way sitdown. The meeting had been in doubt after U.S. envoy George Mitchell failed last week to bridge gaps between the two sides on the settlements.

Nearly half a million Jewish settlers now live in the West Bank and east Jerusalem, and the Palestinians fear their presence and continued growth undermines the establishment of a viable Palestinian state.

Israel annexed east Jerusalem, home to Jewish, Muslim and Christian holy sites, in 1967, and Netanyahu says Israel is entitled to build in the area. However, neither the Palestinians nor the international community recognize this annexation.

Netanyahu has agreed to consider a moratorium on new construction in the West Bank only — but says Israel will continue to build some 3,000 apartments already approved.

Construction defies 2003 blueprint
All of this construction would defy an Israeli commitment under a 2003 peace blueprint to stop all settlement expansion.

Netanyahu has offered to sit down with the Palestinians to negotiate, but they are distrustful of his intentions. The Israeli leader is a longtime patron of the settlements, and his government coalition relies heavily on settler allies.

Restarting formal negotiations after Tuesday's summit won't be easy. After more than 15 years of off-and-on peace talks, the Palestinians don't want to go back to Square One. They want talks to resume where they broke off under Olmert, who made the farthest-reaching proposal ever offered by an Israeli leader. The hawkish Netanyahu is unlikely to agree to such concessions.

Since leaving office, Olmert has disclosed that he offered the Palestinians about 93.5 percent of the West Bank. He said he was willing to swap an additional 6.5 percent of Israeli territory for land on which major Jewish settlements stand and for a corridor linking the West Bank and Gaza.

He also proposed international administration of east Jerusalem's most sensitive holy sites and Israeli officials say he agreed to cede control of some traditionally Arab neighborhoods in the city's eastern sector. He also offered to repatriate to Israel a limited number of Palestinian refugees.

The Palestinians agreed to the concept of a territory swap, but sought more West Bank land. They also demanded Palestinian sovereignty over a disputed hilltop compound that is home to Islam's third-holiest site, the Al-Aqsa mosque complex, officials familiar with the talks say. The complex is also the site of the most sacred shrine in Judaism, the mount where the biblical Jewish temples stood.

The Palestinians have not released their negotiating position on resolving the problem of Palestinian refugees who fled or were driven from homes in Israel in the war following the Jewish state's creation in 1948.

Publicly they demand the return of all Palestinian refugees and their millions of descendants — a stance Israel adamantly rejects on the assumption that Palestinians would ultimately outnumber Jews.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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