Israeli Prime Minister Benjamin Netanyahu signaled he would heed, in part, an appeal from President Obama to continue the settlement freeze.

“Between zero and one there are a lot of possibilities,” Haaretz quoted Netanyahu as telling his Cabinet ministers on Sunday. Other media quoted similar remarks from the prime minister, suggesting that he is considering quashing some – if not all – of the thousands of building permits set to kick in when the partial moratorium he imposed last fall expires on Sept. 26.

After pressure by the United States, Netanyahu imposed the moratorium as a means of enticing Palestinian Authority President Mahmoud Abbas to direct talks. Abbas has threatened to pull out of the direct talks renewed earlier this month unless the moratorium is extended.

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In a news conference last Friday, Obama made clear he would prefer the moratorium to continue.

“What I’ve said to Prime Minister Netanyahu is that, given, so far, the talks are moving forward in a constructive way, it makes sense to extend that moratorium so long as the talks are moving in a constructive way,” Obama said.

Obama also chided the Palestinians for their less than enthusiastic approach to the renewed process.

“A major bone of contention during the course of this month is going to be the potential lapse of the settlement moratorium,” Obama said. “The irony is, is that when Prime Minister Netanyahu put the moratorium in place, the Palestinians were very skeptical. They said this doesn’t do anything. And it turns out, to Prime Minister Netanyahu’s credit and to the Israeli government’s credit, the settlement moratorium has actually been significant. It has significantly reduced settlement construction in the region. And that’s why now the Palestinians say, you know what, even though we weren’t that keen on it at first or we thought it was just window dressing, it turns out that this is important to us.”

The sides return to talks this week, in the Egyptian resort town of Sharm el Sheik. In Netanyahu’s officially released Cabinet remarks, he said his emphasis would be on Palestinian recognition of Israel as a Jewish state, something Abbas has resisted.

“A peace agreement is based – first of all – on the recognition of Israel as the national state of the Jewish people,” he said. “The conflict between us and the Palestinians, as opposed to other conflicts that were resolved by peace agreements, is over the same piece of ground. We say that the solution is two states for two peoples, meaning two national states, a Jewish national state and a Palestinian national state. To my regret, I have yet to hear from the Palestinians the phrase ‘two states for two peoples.’”

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