The Associated Press quoted Israeli state officials who said Israel was exploring several options after reaching the conclusion that a final status agreement could not be achieved at this stage. Netanyahu is slated to give a speech in the coming weeks where he may discuss a possible change of direction in the peace process.
"The consistent refusal of the Palestinian leadership to negotiate with Israel has made a negotiated agreement all but impossible to achieve, at least for the time being," one government official said. "And so we're looking at an Israeli initiative, and steps that we can take that would be a phased approach to a final status agreement."
Palestinian President Mahmoud Abbas announced Thursday that the option of a Palestinian state with provisional borders was unacceptable to the Palestinian leadership. Abbas's spokesman said the option will not be discussed under any circumstance.
"Anything less than an Israeli withdrawal from lands occupied in 1967 (the West Bank, Gaza and east Jerusalem) is unacceptable to us," Nabil Abu Rdeneh said.
The Palestinian official said that the Israeli plan's aim was for the Palestinians to cede Jerusalem which he said was unacceptable. Saeb Erekat also noted his opposition. "This talk of an interim accord and a gradual plan reflect the fact we have no peace partner."