Israeli-Palestinian negotiations are doomed to hit a brick wall because no Palestinian leader will accept anything less than what Yasser Arafat rejected at Camp David 10 years ago, and no Jewish prime minister will offer anything more, Vice Premier and Regional Development Minister Silvan Shalom said Thursday in an interview with The Jerusalem Post.

“No matter what we do, I do not see a Palestinian leader who is willing to accept what Arafat rejected, and I don’t see a Jewish prime minister who can give more than what [Ehud] Barak offered. Therefore, I see it as a dead end,” he said.

At the same time, Shalom said he was in favor of the US-backed indirect talks because they may bring about a greater understanding between the sides.

“It is good that we are talking,” he said. “I am in favor of talking.”

But Shalom made clear it was important to have realistic expectations.

He characterized the US as Israel’s “only friend in the world, who provides diplomatic, military and economic support.” At the same time, he said, any attempt to impose a solution, by the US or any other player, won’t work “because no one will accept it. Israel will certainly not accept it.”

Shalom, who has refrained from granting extensive interviews since the 2009 elections, said that for all intents and purposes, the PA was already functioning like a de facto state.

“True, they don’t have borders,” he said, “but we also don’t have borders.”

Shalom said the proximity talks that US envoy George Mitchell was currently trying to launch were not even really proximity talks in the true sense of the word, but rather “bypass” talks. Proximity talks, he said, are when both sides sit in the same facility, “a hotel or Wye Plantation,” and the mediator passes messages from room to room. Even though Jerusalem is only 25 minutes from Ramallah, Mitchell’s current effort is not the same thing, he said.

According to Shalom, the focus of the current talks should be on economic projects, development of industrial areas, and joint projects in the spheres of electricity, sewage, water and infrastructure assistance. Likewise, he said, the talks should focus on increasing freedom of movement in the West Bank, through the lifting of roadblocks, and ways the Palestinians could fight terrorism and increase security.

Shalom said bluntly that he did not believe the Palestinians would ever recognize Israel as a Jewish state. But, he added, that is not the main barrier to an Israeli-Palestinian agreement. The central barrier to an agreement, he asserted, is “Arafat’s legacy”: By refusing a generous offer in 2000, Arafat set the bar so high for all Palestinian leaders after him that it will be impossible ever to get over it.

According to Shalom, at Camp David and then at Taba in 2001, then-prime minister Barak offered 97 percent of the territory to the Palestinians, with a one-on-one swap for the rest; Palestinian sovereignty over the Temple Mount, and Israeli sovereignty under it; Palestinian control of three of the four quarters in Jerusalem’s Old City; and an intake of some 100,000 Palestinian refugees.

Shalom said Abbas had proved through his failure to accept former prime minister Ehud Olmert's offer in 2008 – which he said was nearly as generous as Barak’s – that he would never accept anything less, and PA Prime Minister Salam Fayyad, who Shalom said was grooming himself to replace Abbas, also couldn’t accept anything less, especially since he did not have Abbas’s Fatah or PLO bona fides.

If anything, said Shalom – breaking ranks with Israeli politicians who regularly praise Fayyad – the PA prime minister is turning more “nationalistic” in order to compensate for the fact that he is neither a Fatah nor PLO executive committee member and needs to gain street credibility to enhance his leadership challenge.

Shalom, who termed this week’s decision by Israeli-Arab leaders to boycott settlement goods “scandalous,” said Fayyad had set this problematic ball in motion.

“He lit a bonfire, threw the Israeli goods into the fire, established a special unit that goes to the grocery stores to take out the goods and levy fines – even though he knows that 25,000 Palestinians work in the settlements,” he said. “Abbas can’t lag behind, so he issued an order that forbids selling goods from the settlements. And then the [PA] communications minister came and issued an order against Israeli cellular phones – but that wasn't enough for Salam Fayyad.”

Shalom said that while he had met Fayyad numerous times in the past, over the last year Fayyad had refused to meet with any Israeli officials.