As Israeli and Palestinian leaders prepare for key peace talks in Egypt, hardline Jewish settlers are vowing to sabotage a political process that they fear, if successful, could endanger the survival of the Jewish state.

Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas sit down for a second round of talks on Tuesday in a US-sponsored effort to end nearly two decades of deadlock, but opponents of the negotiations say they are quietly confident of their failure.

"I expect the whole thing to fail," said Elyakim Haetzni, an octogenarian from Kiryat Arba who was among the founders of the Jewish settlement movement. "A Palestinian state will mark the countdown of our destruction. If the talks were about your demise, you'd prefer no talks."

It's this gloomy thought that occupies the thoughts not only of Mr Haetzni, but also the hundreds of thousands of settlers living in the occupied West Bank who could be forced to leave their homes if an independent Palestinian state ever comes into existence.

Not that any of them believe it will happen. Peace talks have dragged on intermittently for 17 years and despite optimism in some quarters that Barack Obama can deliver a historic peace deal through sheer force of will, Israelis have seen the peace process collapse too many times in far more propitious circumstances than these.

Driving into Kiryat Arba, a heavily-guarded settlement ringed by razor wire, the settlers' weapon of choice against the talks is immediately visible: a row of half-built houses covered with scaffolding. Idle cranes stand nearby as Israelis break for the Jewish New Year holidays.

Settlers have vowed to recommence construction as soon as a 10-month building freeze in the settlements, aimed at coaxing the Palestinians into talks, expires on 26 September. One shopkeeper, a Moroccan Jew who prefered to remain anonymous, said: "I want to build. It's my country and I'm not stopping."

Mr Netanyahu heads a right-wing and pro-settler coalition that is fiercely opposed to any steps against the settlers, the 300,000 Jews who have built their homes in the conviction that it is their God-given right to live there. Fearful of losing his coalition partners and triggering new elections, he has already ruled out an extension of the freeze.

Nevertheless, Mr Abbas has threatened to walk out if construction continues, presenting a premature obstacle to the talks, where the settlement issue is expected to loom large. Settlers fear Mr Netanyahu, under pressure from Washington to make concessions, will sidestep the issue by snarling up any new construction permits in a lengthy bureaucratic process.

Alternatively, he could seek a compromise that would allow building to continue in the major settlement blocs expected to remain in Israeli hands under a land swap deal.

"If the aim behind any kind of compromise is to allow the continuation of talks, that's not going to work," said David Wilder, the spokesman for a hardcore of settlers in central Hebron, a West Bank town that is still shocked by the killing of 29 Palestinians at prayer by an Israeli gunman 16 years ago.

"People will build, and if the government is looking to get involved in extra violent clashes with law-abiding citizens, that's what they'll do," said Mr Wilder.

Meanwhile, settlers are increasingly concerned that Mr Netanyahu, who campaigned on a pro-settler platform, will yet betray them, noting with alarm his use of the term "West Bank" in a speech in Washington. Mr Netanyahu normally refers to the territory by its biblical name, Judea and Samaria.

Mr Haetzni is among those using his influence to lobby politicians in the Knesset, Israel's parliament, to take steps that would upset the peace process should a deal look imminent.

"We are very busy on the political scene. We talk to all the Knesset members, who [say they] are ready. We have a very pro-nationalistic Knesset," Mr Haetzni, a former politician says. "That's all I can say for the moment."

For Mr Obama, much is riding on the outcome of these talks. Desperate to present a foreign policy success ahead of midterm elections, he has invested considerable political capital in bringing the two reluctant partners to the negotiating table.

Hamas, the militant Palestinian group that governs Gaza and which is deeply opposed to talks, has already tried to disrupt the negotiations with a deadly shooting near Hebron two weeks ago that killed four settlers.

That prompted a furious outpouring from settlers, many of whom refuse to distinguish between Hamas and Mr Abbas' more moderate Fatah movement, which dominates the West Bank.

Indeed, some observers say the shootings have bolstered support for Hamas, while Palestinians see Mr Abbas as having yielded on many of his key conditions for returning to direct talks.

"If agreement is signed and political institutions do not have legitimacy... instead of seeing a two-state solution, we may see the collapse of the Palestinian Authority," warns Gidi Grinstein, a former negotiator in Ehud Barak's government. "It's a very high-risk strategy that is being played right now."