* Plan falls short of Palestinian demands * Abbas calls for U.S. pressure on Israel * U.S. wants peace talks to resume without preconditions By Jeffrey Heller JERUSALEM, Nov 25 (Reuters) - Israeli Prime Minister Benjamin Netanyahu intends to announce on Wednesday a formal plan to limit settlement construction for 10 months, hoping to revive talks with the Palestinians, government sources said. Netanyahu's offer will exclude areas of the West Bank that Israel annexed to its Jerusalem municipality after capturing the territory in a 1967 war, the sources said. That would fall short of a Palestinian demand that Netanyahu freeze settlement on all occupied land before peace negotiations, suspended since December, can resume."The prime minister apparently will announce this evening a 10-month freeze on settlement construction in the West Bank, not including natural growth or East Jerusalem," one of the sources said. Netanyahu's spokesman was not immediately available for comment. The Israeli leader has rejected a complete halt to construction in settlements, saying the "natural growth" of settler families must be accommodated. He has proposed limiting Israeli construction temporarily in the West Bank to some 3,000 homes. Israeli officials have said such a moratorium could last for nine months to a year. By announcing a formal plan, Netanyahu could hope to win explicit U.S. backing and increased pressure from Washington on the Palestinians to return to peace talks without preconditions. Palestinian Prime Minister Salam Fayyad, asked about a possible 10-month Israeli moratorium, told reporters: "What has changed to make something that what was not acceptable a week or 10 days ago (acceptable now)? the exclusion of Jerusalem is a very serious problem for us." COMPLETE FREEZE In a video interview that appeared on Wednesday on the Web site of Argentina's Clarin newspaper, Palestinian President Mahmoud Abbas reiterated his demand for a complete settlement freeze and called for U.S. pressure on Israel. "We do not believe we can restart the negotiations with them while they are continuing building in our territories," Abbas said. "They should stop it and after that we negotiate the borders," he said, referring to a state Palestinians hope to establish in the West Bank and Gaza Strip. Some 500,000 Jews live in the West Bank and East Jerusalem alongside 2.7 million Palestinians. The settlements, Palestinians fear, could deny them a viable state. In the newspaper interview, Abbas appealed for greater personal involvement by U.S. President Barack Obama in Washington's efforts to restart the peace talks. "Till now he didn't do anything. But he is doing his best to revive the peace process," Abbas said. "I believe that in the future he can play a role more than he is doing now." Obama had initially called on Israel to freeze settlement activity, but later softened his position by appealing only for restraint. The shift frustrated Palestinian leaders who had hoped Obama would revive the peace process. Abbas told the newspaper said he did not believe the Netanyahu government was looking for peace. "But it is a problem of the Israeli side, the Israeli people. Because as far as I know, 70 percent of the Israelis are for peace. So they should elect a new government ... that believes in peace." (Additional reporting by Alastair Macdonald and Erika Solomon in Ramallah; editing by Samia Nakhoul) (For blogs and links on Israeli politics and other Israeli and Palestinian news, go to http://blogs.reuters.com/axismundi) ((jeffrey.heller@reuters.com; Reuters Messaging: jeffrey.heller.reuters.com@reuters.net))
Israeli boys look at the debris from a helicopter after it crashed into the Mediterranean Sea near the city of Netanya north of Tel Aviv November 24, 2009. All four people ...
