RAMALLAH, Nov. 25 (JMCC) - Israeli officials made three demands in negotiations over a settlement freeze that ultimately scuttled the talks, reports the Palestinian newspaper al-Ayyam.

The US administration has been in talks with Israel to impose a 90-day moratorium on settlement construction that would allow direct talks between Palestinians and Israelis to move forward. Palestinian President Mahmoud Abbas has refused to negotiate directly with Israel as long as it is constructing settlements in the occupied Palestinian territories.

Israel said it would impose a 90-day settlement freeze if the agreement stipulated in writing that construction would be allowed to continue in East Jerusalem, land that Palestinians hope will be their capital in a future Palestinian state.

Israel also said it would not consider extending the settlement freeze longer than 90 days.

It additionally refused to include the issue of borders among the initial agenda items in talks. Where the borders will fall in the future Palestinian state is tied intimately to the issue of settlements. Palestinians say that Israel seeks to continue expanding settlements as long as possible, thereby impacting the outcome of final status talks. 

These three conditions proved too much for the US team to swallow, reported the newspaper, and the team of US envoy George W. Mitchell is now dampening expectations that an Israel-US agreement over a freeze is on the horizon.

Initial reports were that the United States had agreed to sell fighter jets to Israel in exchange for Israel's imposition of a three-month settlement freeze, similar to the one that was in force for ten months of this year.