Israel's foreign minister said Wednesday that it would be unacceptable to extend a slowdown on West Bank settlement construction, even as Mideast peace talks get under way next week.

Avigdor Lieberman, whose ultranationalist Yisrael Beitenu party is a major partner in the governing coalition, told Israel Radio he realized that resuming settlement construction would antagonize both the U.S. and the Palestinians. But he said that maintaining tight restrictions on building would "punish" tens of thousands of Israelis living in the settlements.

"We don't need to create unnecessary conflicts but we don't need to punish and we don't need to fold either," he said.

Lieberman's comments added a powerful voice to a debate that is having deep repercussions for the U.S.-backed peace process. A 10-month moratorium on most West Bank construction expires Sept. 26 and Prime Minister Benjamin Netanyahu is under heavy domestic pressure to allow building to resume.

Renewed construction in the settlements could spell disaster for the peace talks before they even get off the ground. But leaving the moratorium in place could cause Netanyahu's hard-line Israeli government to crumble.

Government spokesman, Mark Regev, refused to say what Netanyahu would do after the settlement slowdown expires.

Israeli officials said they hope to reach some sort of arrangement before next week's summit launching the peace talks in Washington. But an agreement is far from certain. The U.S. is pushing Israel to refrain from any action that could upset the peace talks, and the Palestinians have threatened to walk away from the negotiating table if any settlement activity resumes.

Lieberman suggested that Israel resume construction in major settlement blocs that Israel expects to retain under a future peace deal, while limiting construction elsewhere.

Some 80 percent of the nearly 300,000 West Bank settlers live in these blocs, which are concentrated along the boundary with Israel. Past proposals have suggested that Israel "swap" an equal amount of territory in exchange for the settlements.

After months of shuttle diplomacy, the U.S. announced last week that direct talks between Israelis and Palestinians would resume on Sept. 2 at the White House. The U.S. hopes to forge a final peace settlement within one year.

Lieberman added that he had doubts about the Palestinians' intentions at the talks.

"They are not coming out of true good will to make peace, they are coming because they were forced to come," he said. "I think everyone should lower expectations."

The roughly 120 Jewish settlements that dot the West Bank have long been a sore point in Mideast peacemaking. Israel began settling the territory soon after capturing it along with Gaza and east Jerusalem in the 1967 war.

The Palestinians say the settlements, interspersed among some 2.4 million Palestinians, are gobbling up land they want for a future state. The international community considers them illegal, and President Barack Obama has been an outspoken critic.

Under intense U.S. pressure, Netanyahu imposed the slowdown last November to draw the Palestinians to the negotiating table. The move barred approval of new housing construction, though hundreds of homes already being built were allowed to be completed.

Netanyahu also quietly imposed a similar slowdown in east Jerusalem early this year after a run-in with the U.S. over Israeli policies in the area.

Palestinian President Mahmoud Abbas has expressed strong reservations about negotiating with Netanyahu, fearing the talks will be a waste of time and that his already poor public standing could suffer further damage.

On Wednesday, dozens of Abbas supporters stormed into a meeting hall in the West Bank town of Ramallah and blocked a group of opposition activists from holding a meeting to voice their objections to the peace talks. The men shouted slogans in favor of Abbas and his Fatah party.

The activists, from opposition factions inside the Palestine Liberation Organization, had planned to issue a statement urging Abbas not to speak to Israel until there is a complete halt to all settlement activity.

One of the organizers, independent lawmaker Mustafa Barghouti, claimed the mob were pro-Abbas security men disguised in civilian clothes. He called the attack a "stark violation of human rights."

West Bank police spokesman Adnan Damiri denied the allegations and said no security forces were involved.