WASHINGTON: Israeli Prime Minister Benjamin Netanyahu told US Secretary of State Hillary Clinton there would be no extension of an Israeli moratorium on settlement construction that expires at the end of the month, his office said on Wednesday. Netanyahu and Palestinian leader Mahmoud Abbas will hold separate meetings with United States leader Barack Obama on Wednesday at the White House ahead of a dinner and the start of direct bilateral negotiations. The direct talks begin on Thursday. Egyptian President Hosni Mubarak said in comments published that Israel must extend a settlement moratorium.

The United States will have an “active and sustained role” in upcoming peace talks, US envoy George Mitchell said.

Israel’s Defence Minister Ehud Barak said Israel would be willing to hand over parts of occupied Jerusalem in the peace talks.

Israeli and Palestinian leaders for dinner at the White House in Washington. But the US President faces deep scepticism about his chances of success.

Barak’s comments about the need to partition Jerusalem could signal Netanyahu’s willigness to divide the city in any final peace deal on the issue.

“West Jerusalem and 12 Jewish neighbourhoods that are home to 200,000 (Israeli) residents will be ours,” Barak told the Haaretz newspaper.