Report: Obama Offers Netanyahu "Far-Reaching Promises" for Settlement Freeze

President Barack Obama meets with Israeli Prime Minister Benjamin Netanyahu, in the Oval Office of the White House in Washington, Wednesday, Sept. 1, 2010.

Today's Ma'ariv Tel Aviv daily newspaper says in a front page leak that President Obama has sent a letter to Israeli Prime Minister Benjamin Netanyahu which contains "far-reaching promises" which the U.S. would grant in exchange for a one-time extension of the settlement freeze.

The freeze expired last Sunday. The State Department has praised Palestinian President Abbas so far for his "restraint" in not walking out of direct peace talks with Israel, which only started up again recently under intense pressure from the Obama administration.

Middle East envoy George Mitchell is in Israel now trying to find a way to continue the direct negotiations. Abbas meets Monday with the Arab League to decide how to proceed. There have been repeated threats that the Palestinians are ready to walk out if the settlement freeze is not renewed.

In this atmosphere, Israeli Foreign Minister Avigdor Lieberman gave a highly controversial speech to the United Nations General Assembly on Tuesday, in which he said a permanent peace with the Palestinians is not currently possible. (Here is how the speech was covered by Israel's Jerusalem Post.

Lieberman himself is a resident of a West Bank settlement and says his views represent the majority of the Israeli people. He would probably take his Yisrael Beitenu (Israel Our Home) Party and leave Netanyahu's coalition if he attempts to extend the settlement freeze. That would leave the Israeli government in danger of collapse. Peace talks would surely remain on hold until a new government could be elected.

Yet, Ma'ariv says, Mr. Obama is offering treats to Netanyahu to get him to agree to freeze settlement construction. "Among the incentives," according to reporter Eli Bernstein, "a promise to torpedo any one-sided declaration of a Palestinian state."

Netanyahu is refusing, for now, according to Ma'ariv.

Correspondent Howard Arenstein is the Washington Bureau Manager for CBS Radio News.