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Last week Tony Blair, the envoy of the Quartet of Middle East peacemakers - the EU, the UN, the US and Russia - admitted that without change on the ground it was unlikely that the negotiations, launched four months ago in Annapolis, Maryland, would succeed.

Erekat, a veteran negotiator, said that 358 Palestinians had been killed and 1,200 wounded in those four months, with more than 2,000 arrested and 35 houses demolished. He said 5,378 housing units were under construction in Jewish settlements in East Jerusalem and in the West Bank, even though the US road map - the framework for the talks - stipulates that Israel must freeze settlement activity.

"This is what the Palestinians see being done and at a time when we are trying to tell them we are going to make the year 2008 a year of peace," Erekat said at a press conference in East Jerusalem.

He also admitted that the Palestinians had failed to fulfil their commitments under the road map, which focus on halting militant activity and imposing the rule of law. More than a dozen Israelis have died since Annapolis. "As far as our obligations go, I am not saying we have finalised. We have a long, long way to go," he said.

Erekat said the parameters of a two-state peace deal had been negotiated several times in recent years.

"We have come a long way. Now it is time for decisions. Will the leaders deliver the decisions? I don't know. Can they deliver the decisions? Yes they can."

Other senior Palestinian figures have warned that a failure to reach a deal this year might bring the collapse of the Palestinian Authority, which was set up with limited powers after the Oslo accords more than a decade ago. Erekat too hinted at this: "If we fail to produce an agreement by the end of 2008 I think we may disappear. This is how critical the situation is in Palestinian political life." It is not yet clear, however, whether this is a serious proposition or a negotiating tactic.

For now Israeli leaders have, at least in public, sounded more upbeat. "We are optimistic about negotiations, in spite of what you occasionally read," the Israeli prime minister, Ehud Olmert, said yesterday.

US senator John McCain, the presumptive Republican presidential nominee, met Olmert in Jerusalem yesterday and said he believed Abbas wanted a peace agreement. The US vice-president, Dick Cheney, is due in the Middle East this weekend to further the talks and the US secretary of state, Condoleezza Rice, will follow him later this month.

In private, Israeli officials have sounded sceptical about the chance of a deal this year, saying in particular that the continued control of Gaza by Hamas would effectively scupper any agreement.

Yesterday the International Crisis Group said that efforts to isolate Hamas in Gaza with an economic blockade had not only failed but had weakened the more pragmatic faction led by Abbas.

"The gravest threat to diplomacy comes not when Hamas has something to gain, but when it concludes it has nothing to lose," it said.

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