Netanyahu Paints Grim Picture Of Peace Talks For Kerry

JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu said on Wednesday peace talks with the Palestinians had failed to make real progress and he hoped visiting U.S. Secretary of State John Kerry could get them back on track.

The grim picture painted by the right-wing leader was similar to the one sketched by senior Palestinians, who have said an Israeli plan announced last week for 3,500 more settler homes in the occupied West Bank was a major obstacle to the success of the negotiations.

"I am concerned about the progress because I see the Palestinians continuing with incitement, continuing to create artificial crises, continuing to avoid, run away from the historic decisions that are needed to make a genuine peace," Netanyahu told reporters, with a stone-faced Kerry at his side.

Netanyahu said he hoped Kerry's discussions in Jerusalem and with Palestinian President Mahmoud Abbas "will help steer (the negotiations) back to a place where we could achieve the historical peace that we seek."

Kerry, whose shuttle diplomacy helped to revive the land-for-peace talks last July after a three-year break, said he was confident progress could be made in the six months remaining in a nine-month target window for a deal.

But he also acknowledged the negotiations had run into difficulties and spoke of a need for "real compromises and hard decisions" from both sides.

"President Obama sees the road ahead as do I and we share a belief in this process or we wouldn't put time into it," said Kerry, who arrived in Israel on Tuesday.

Few details have emerged from the negotiations, held at unannounced times and at secret locations in line with pledges to keep a lid on leaks.

But Palestinian officials have been airing their frustration over a lack of movement on core issues such as the borders of a Palestinian state, security arrangements, the future of Israeli settlements and the fate of Palestinian refugees.

Abbas, in a speech broadcast on Monday, said that after all the rounds of negotiations "there is nothing on the ground".

Public friction between the two sides has been focused on Israel's public linkage of its release of Palestinian prisoners and its drive to erect more homes for settlers.

On the sidelines of the peace talks, Israel has released half of the 104 Palestinian prisoners it pledged to free under a deal Kerry brokered to draw Abbas back to negotiations that Palestinians abandoned in 2010 over settlement building.

Palestinians have bridled at any suggestion they agreed to turn a blind eye to the settlement campaign, on land they seek for a state, in return for the men, long-serving inmates convicted of killing Israelis.

The settlements that Israel has built in the West Bank and East Jerusalem, territories it captured in the 1967Middle East war are considered illegal by most countries. Israel cites historical and biblical links to the areas, where about 500,000 Israelis now live alongside 2.5 million Palestinians.

In another development, Netanyahu said former Israeli Foreign Minister Avigdor Lieberman will return to the cabinet after his acquittal in a corruption trial on Wednesday.

The right-wing powerbroker is a hardliner on the peace talks with the Palestinians.

(The story was refiled to add Abbas title)

(Writing by Jeffrey Heller; Editing by Angus MacSwan)