The Palestinian president has left the door open to continuing peace negotiations with Israel even if it resumes settlement construction in the West Bank, offering a glimmer of hope that a compromise will be reached in a key dispute that has threatened to torpedo the newly relaunched talks.

But in a reminder of the fragile negotiating climate, a private Israeli security guard shot and killed a Palestinian man in a volatile east Jerusalem neighborhood early Wednesday, sparking clashes between stone-hurling youths and Israeli forces.

During the man's funeral, a mob of protesters set tires on fire, smashed the windows of several buses and screamed for revenge. "We will defend you with our blood and souls, martyr."

Palestinian President Mahmoud Abbas has repeatedly threatened to walk away from peace talks, launched this month in Washington, if Israel resumes building in its West Bank settlements after a 10-month moratorium expires on Sunday.

Israeli Prime Minister Benjamin Netanyahu has said he will not extend the slowdown, which has put thousands of planned housing starts on hold. Israel has also quietly halted new construction in east Jerusalem, the disputed sector of the city that the Palestinians claim for their future capital.

Speaking to a closed meeting of Jewish American leaders in New York late Tuesday, Abbas made clear that he wants to continue the dialogue with Israel and signaled that he was backing away from his ultimatum.

"I cannot say I will leave the negotiations, but it's very difficult for me to resume talks if Prime Minister Netanyahu declares that he will continue his activity in the West Bank and Jerusalem," Abbas said, according to a transcript of the event obtained exclusively by The Associated Press.

Abbas urged Israel to extend the building restrictions for several months while the sides negotiate the final borders between Israel and a future Palestine. "At that time, Israelis will be free to build in their territory and the Palestinians the same," he said. Israel has reacted coolly to that suggestion.

Some 50 leaders of Jewish American organizations as well as former diplomats and policymakers attended Tuesday night's meeting with Abbas, who is in New York for the General Assembly of the United Nations. The two-hour gathering was sponsored by the S. Daniel Abraham Center for Middle East Peace.

While Palestinians have traditionally viewed American Jews with suspicion, Abbas has decided instead to court Jewish leaders, believing they can play a positive role in peace efforts.

Throughout his two-hour meeting Tuesday, Abbas struck a conciliatory tone as he answered questions. On several occasions, he referred to Netanyahu as his "partner" in the quest for peace.

"Is there a more significant and more precious goal than achieving peace?" he said. "We believe that our children and grandchildren deserve a better future for peace, prosperity, dignity and security."

Groups ranging from the Anti-Defamation League to the Conference of Presidents of Major American Jewish Organizations and the Orthodox Union were represented. The former officials included ex-Secretary of State Madeleine Albright and former National Security Adviser Sandy Berger.

Israeli and Palestinian officials have also been meeting with American mediators in hopes of resolving the standoff over the settlements.

The U.S., along with the European Union, has urged Israel to extend its settlement slowdown — a move that Netanyahu is resisting because of heavy pressure within his hard-line governing coalition, which is dominated by pro-settler lawmakers.

At the same time, Washington is pressuring Abbas not to quit the talks just weeks after they got under way at a White House summit.

The settlement issue is one of the thorniest in the peace talks. Some 300,000 Israelis live in settlements dotting the West Bank, in addition to 180,000 Israelis living in Jewish neighborhoods built in east Jerusalem.

The Palestinians say that by gobbling up territory they claim, continued settlement expansion makes it ever more difficult to establish a viable Palestinian state.

The Palestinians want all of the West Bank as part of their future state, with east Jerusalem as their capital. Israel captured both areas in the 1967 Mideast war. It subsequently annexed east Jerusalem, home to sensitive Jewish, Muslim and Christian holy sites, though the annexation is not internationally recognized.

The conflicting claims to east Jerusalem have been the most explosive issue in two decades of on-again, off-again peace talks. The area is a frequent flash point of fighting.

Wednesday's violence took place after a 32-year-old Palestinian laborer was killed by a private security guard watching over Jewish families in the Silwan neighborhood. About 70 Jewish families live amid 50,000 Palestinians there.

Police said the man, Sami Sirhan, had a criminal record. But residents said that, as a father of five young children, he was unlikely to hurl rocks at an armed guard.

Wearing shirts over their faces, protesters hurled chunks of concrete and rocks at paramilitary police who came to the area after the shooting. Forces responded with tear gas.

Clashes also broke out during Sirhan's funeral. A crowd set a paramilitary police vehicle on fire, destroying it, and smashed windows on five buses. A crowd of tourists stood alongside one of the buses, stranded after their vehicle was damaged.

Tensions in Silwan have worsened since the city government announced an economic development plan early this year that would demolish dozens of Palestinian homes.