The latest round of the U.S.- sponsored direct peace talks between Israel and the Palestinians were stumbling as the two sides differed on the issue of whether or not Israel should extend its 10-month freeze on settlement construction in the West Bank after it ended last week.

Analysts said that both Israel and the Palestinians are now trying to escape being blamed for delaying the peace talks, while reaffirming close relations with the Washington.

BLAME GAME STARTS

Palestinian officials said that Israel's refusal to extend freeze on settlement construction showed that the current government led by Prime Minister Benjamin Netanyahu was not interested in peace.

Meanwhile, Israeli right wing politicians said in response that Israel had offered a 10-month moratorium, but the Palestinians did not agree to return to the negotiation table until last month, which showed the Palestinian National Authority (PNA) led by President Mahmud Abbas was not interested in peace.

"It is a blame game," said Michael Shamir at the Department of Political Science of the Tel Aviv University. "Both sides are trying to maintain their relations with the U.S. which is strongly pushing for the talks to continue."

"In my opinion this is not the end of the game. We have to wait for the Arab League's decision of whether or not to continue the talks," Shamir added.

Hani Masry, a Palestinian political analyst, said that " Netanyahu blames Abu Mazen (Abbas) and Abu Mazen tries to blame Netanyahu" because they do not want to lose the support of the U.S. administration.

"Until now we can't say that we are in a crisis," Masry said, adding that "(U.S special envoy George) Mitchell is still in the region and we must wait until Friday for the decision of the Arab League meeting to see if there is a crisis."

In the West Bank, there are 300,000 Jewish settlers living in around 100 settlements built adjacent to Palestinian towns and villages and are protected by the Israeli army. Currently, about 2. 5 million Palestinians live in the West Bank and east Jerusalem.

Palestinians view the West Bank and east Jerusalem as part of their future independent state and claim that any Israeli construction in these areas constitutes a violation of international law.

U.S. special envoy to the Middle East George Mitchell said before that the talks between Israel and the Palestinians were successful and progressing steadily.

But diplomatic sources from both sides quoted by the Israeli media revealed a different picture as they described Mitchell's statement as "inaccurate" and "a false presentation of progress."

The Israeli newspaper Haaretz reported that the first two meetings held between Netanyahu and Abbas, first on Sept. 2 in Washington and then in the Egyptian Red Sea resort of Sharm Sharm el-Sheikh only dealt with technical issues such as the order of the various subjects to be discussed and the future of the moratorium on settlement construction, let alone the key issues including the future Palestinian state, the status of Jerusalem and Palestinian refugees.

Ghassan Khateeb, an advisor to the Palestinian National Authority Prime Minister Salam Fayyad, said that it would strengthen the U.S. position in the Middle East if the talks were successful.

"It is in the strategic interest of the United States in this region that progress would be made towards a solution of this problem," he said.

"Settlement activities without negotiations are illegal," Khateeb said, "and the goal of the negotiations is not only to stop the expansion of settlements but also to dismantle them."

"The whole world is blaming Israel for not stopping the settlement expansion as this is the cause of crisis," He said, " this is not a public relation race on who is the most active one in blaming the other side, everyone is blaming Israel."

Though not all Israelis thought that the peace talks with the Palestinians were necessary, the talks should be continued, Shamir said.

"If the talks failed, it would be a major mistake for Israel," he said. "I think Israel needs to continue the talks, just like the Palestinians, even if not all our politicians see it that way. "

"I hope the talks will continue," Shamir said.

While the situation might look gloomy at the moment, Khateeb said, there is still hope for the future.

"There are efforts to solve this crisis and this is not the end of the talks," he said.

Speaking of the outcome of the Arab League meeting to be held this week in Cairo, Khatteb said that "I expect the Arab League to back the position taken by the Palestinian National Authority yesterday (Saturday) that there will no talks until the freezing [ of the settlements] is extended."

But even if the Arab League decided to stop the talks, the pause will only be temporary, Masry said.

"The Palestinian National Authority and the Arab World does not believe in any other solution than negotiations," he said, adding that "even if there is a crisis, it will not be the end of the game, they will simply wait until the situation changes."