JERUSALEM - Israeli and Palestinian negotiators are to convene on Sunday in the latest attempt to save teetering peace talks, a Palestinian official told AFP.
Chief Palestinian negotiator Saeb Erakat would meet his Israeli opposite number, Justice Minister Tzipi Livni and Prime Minister Benjamin Netanyahu's special envoy Yitzhak Molcho during the afternoon, the official said, speaking on condition of anonymity.
There was no confirmation from the Israeli side.
The teams last met on Thursday in a session presided over by US envoy Martin Indyk, who has since returned to Washington for consultations while Israel observes the seven-day Passover holiday starting at sunset on Monday.
But following that meeting the peace process suffered a new blow when Israel said it would freeze the transfer of duties it collects on the Palestinians' behalf, in retaliation for their diplomatic offensive against Israel at the United Nations.
The monthly 80 million euros (US$111 million) in taxes collected by Israel represents about two-thirds of the income received by the Palestinian Authority.
Israel was also suspending its participation with the Palestinians in developing a gas field off the Gaza Strip and putting a cap on Palestinian deposits in its banks, the Israeli official said.
The decision sparked concern in Washington.
"We've seen these press reports, but we have not seen an official public announcement by the Government of Israel," state department spokeswoman Jen Psaki briefed reporters on Friday.
"That said, we would regard such a development as unfortunate. We believe that the regular transfer of the Palestinian Authority's tax revenues and economic cooperation between Israel and the Palestinian Authority has been beneficial and is important to the well-being of the Palestinian economy."
The talks hit an impasse two weeks ago when Israel refused to release as agreed a group of Palestinian prisoners and the Palestinians retaliated by seeking accession to several international treaties.