With Israel's ten-month freeze on construction in Jewish settlements on the West Bank ending earlier this week, speculation is rife about what this will mean for the current round of negotiations between the Israelis and Palestinians under the supervision of U.S. President Barack Obama. Palestinian President Mahmoud Abbas has threatened to walk away from the talks if Israel does not extend the freeze.

According to an article published on Wednesday by David Makovsky, a researcher at the Washington Institute for Near Policy with close ties to Obama's chief advisor on the Middle East Dennis Ross, Obama has sent a letter to Israeli Prime Minister Benjamin Netanyahu calling on him to extend the freeze for two more moths.

The letter allegedly offered Obama's support for the presence of the Israeli army in the Jordan Valley, an area on the West Bank north of the Dead Sea, even after the establishment of an independent Palestinian state, in exchange for a two-month extension of the construction freeze.

The Palestinians view the Jordan Valley along with the rest of the West Bank, which Israel has occupied since the 1967 war, as part of their future state and oppose any Israeli military presence or expansion of the settlements built there as encroaching on their homeland.

But Benjamin Chang, the deputy spokesman for the White House National Security Council, denied that any letter has been sent.

"No letter was sent to the Prime Minister," Chang said in an official statement. "We are not going to comment on sensitive diplomatic matters."

NO LETTER BUT AN OFFER

Analysts told Xinhua they do not believe that a formal letter was sent from Obama to Netanyahu.

In 2004, then American President George W. Bush sent a letter to then Israeli Prime Minister Ariel Sharon, in which Bush outlined support for Israeli security concerns and a continued Israeli presence in some of the larger settlement blocs on the West Bank. The Bush letter was delivered as Sharon was preparing for Israel to leave the Gaza Strip and some settlements in the northern West Bank in the 2005 disengagement.

The Bush letter stated that "in light of new realities on the ground, including already existing major Israeli population centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949," referring to the Green Line border from 1948 to 1967. During that period, East Jerusalem and the West Bank were controlled by Jordan, and the Gaza Strip became Egyptian- controlled territory.

Dr. Ziad Asali, president of the American Task Force for Palestine, a pro-Palestinian lobby group in Washington, said he believed an offer has been made.

"I think it's true," Asali said, "I think they are trying to continue the talks with assurances for Israel."

Eytan Gilboa, a senior researcher at the Begin Sadat Center for Strategic Studies at Bar-Ilan University near Tel Aviv, said that a letter might not have been sent but he believes some kind of offer was made.

"Obama is so anxious to get the negotiations going that he is using a combination of the carrot and the stick and he does it with both sides -- not just the Israelis," said Gilboa. "He is trying to correct the mistake of the excessive focus on the settlement freeze which backfired."

"I don't think there was any letter to Netanyahu nor to Abbas but there were discussions on both sides," Gilboa said.

"I think this is a mistake Obama is making; he is wasting the capital that might be needed further along the road," he said.

"The issue has become a symbol, I don't think it's an important question but it has become a symbol," Gilboa added.

The status of Jerusalem, the borders of the future Palestinian state and the status of the Palestinian refugees that are scattered across the world following the establishment of Israel in 1948 and the 1967 war are regarded as the major and most difficult issues in the negotiations.

"What Obama is trying to do just one month before the midterm elections is to save the negotiations because a breakdown would mean a failure of leadership, that he can't lead," Gilboa said, referring to the upcoming elections of new members for the U.S. Senate and House of Representatives.

Asali said Mahmoud Abbas would need cast-iron guarantees to continue negotiations without an extension of the settlement freeze.

"The Palestinians are not convinced by anything," said Asali.

"They are postponing the meeting of the Arab League and I don't think that we will hear anything (official) for another week. There will be intense discussion between the Palestinians and the Arabs and Americans and the Israelis," Asali said.

"The Palestinians don't want to walk away; it's not in their political interest," he added.

Recently, Israel's military chief of staff Lt. Gen. Gabi Ashkenazi warned that a failure in the latest round of negotiations could lead to a new violent Palestinian uprising. However, he did not predict that it would be on the same scale as the Second Intifada -- dubbed the Al-Aqsa Intifada -- which raged between 2000 and 2005 and saw scores of Palestinian suicide bombers in Israeli cities and a devastating Israeli military takeover of the West Bank.

While Asali believes that Hamas is waiting in the background for the talks to fail, he did not foresee a return to violence.

"They will see that they will need a political solution and have already stopped with resistance," he said in reference to the activity of Hamas.

Gilboa also does not believe that failure in the current round of negotiations will have devastating consequences.

"I don't think this is the end," Gilboa said.