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By Jeffrey Heller
JERUSALEM (Reuters) - Israel announced on Wednesday a plan to limit settlement construction for 10 months in a bid to revive peace negotiations with the Palestinians who said the partial moratorium did not meet their terms for talks.
Prime Minister Benjamin Netanyahu's proposal excludes areas of the West Bank that Israel annexed to its Jerusalem municipality after capturing the territory in a 1967 war and building projects already under way, government officials said.
"Any return to negotiations must be on the basis of a complete settlement freeze, and in Jerusalem foremost," said Nabil Abu Rdainah, a spokesman for Palestinian President Mahmoud Abbas.
A statement issued by Netanyahu's office said he would ask his security cabinet to approve later in the day a 10-month suspension of new residential building permits and residential housing starts in "Judea and Samaria," Israel's terms for the West Bank excluding annexed areas around Jerusalem.
The "temporary suspension," the statement said, was part of an effort "to restart peace talks with the Palestinian Authority."
Netanyahu has rejected a complete halt to construction in settlements, saying the "natural growth" of settler families must be accommodated.
He had proposed limiting Israeli construction temporarily in the West Bank to the 3,000 homes either under construction or whose building has been approved. Israeli officials had said a partial 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.
"It enables us to present the world with a simple truth: the Israeli government wants to enter into negotiations and it is very serious about its intention to advance peace," Netanyahu said, according to a message sent to reporters by his office.
In a video interview that appeared on Wednesday on the Web site of Argentina's Clarin newspaper, 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 annexed areas around Jerusalem alongside 2.7 million Palestinians. The settlements, Palestinians fear, could deny them a viable state.
U.S. President Barack 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 Erika Solomon in Ramallah; editing by Samia Nakhoul)