Israeli Prime Minister Benjamin Netanyahu is preparing the ground for a possible centrist coalition, if a resumption of talks with Palestinian Authority and an extension of the settlement freeze cause a major crisis within his government.

Another week has gone by without a decision by Mr Netanyahu on the future of the settlement freeze, now at the centre of Palestinian conditions for continuing direct peace talks.

Benajmin Netanyahu has offered to halt construction in the West Bank if the Palestinians recognise Israel as a Jewish state.

The Israeli prime minister said that the Middle East conflict “will never end” unless the Palestinians agree to this.

A ten-month-long freeze on settlement construction expired last month. Talks between Mr Netanyahu and Palestinian president Mahmoud Abbas have stalled in the wake of this.

Resolving the Arab-Israeli conflict would have “more impact by far than anything else” on global terrorism levels, according to Bill Clinton.

The former US president said that a Middle East peace agreement would “take about half the impetus in the whole world for terror away".

Speaking at a conference in Cairo, President Clinton said that a deal could have a knock on effect on Syrian support for Hizbollah and Iran’s nuclear ambitions.

Israel's version of procrastination is epitomised in the phrase acharei ha-chagim. In other words, "after the High Holy Days", which is when Israelis promise to get things done, start a new diet and generally set their lives in order. This week, acharei ha-chagim also symbolises the next stage of the diplomatic process.

Benjamin Netanyahu has called for "expedited, honest talks" with the Palestinians to continue as the ten-month-long settlement construction freeze came to an end.

In a statement, the Israeli Prime Minister said: "Israel is ready to pursue continuous contacts in the coming days to find a way to continue peace talks."

US officials also urged the negotiations to continue despite the expiry of the moratorium.

Israel is believed to be considering a peace deal under which construction in the West Bank would remain halted in return for the freeing of a Jewish American jailed by the US for spying in 1987.

A freeze on settlement building is due to expire on September 24 and Palestinian President Mahmoud Abbas has warned that he will leave the recently revived Middle East talks if it is not extended.

The former Israeli prime minister, Ehud Olmert, has revealed details of a comprehensive Middle East peace deal proposed in September 2008 but rejected by Palestinian negotiators.

According to Mr Olmert, the deal would have involved shared governance of Jerusalem and seen the then United States president George W Bush offer 100,000 Palestinians US citizenship.

The scope of the concessions offered by Mr Olmert was confirmed by Palestinian negotiator Saeb Erekat.

Three decades after Israel’s independence and 22 years after the Suez Crisis Egypt became the first Arab country to recognise its right to exist.

After 12 days of secret and intensive negotiations overseen by US president Jimmy Carter at the Maryland estate, an agreement was reached between Menachem Begin and Anwar Sadat giving Egypt control of the Sinai Peninsula.

The events of September 1978 ultimately became the Egypt-Israel peace treaty, signed in March 1979. Mr Begin and Mr Sadat later shared the Nobel Peace Prize and by 1982 Israel had completely left the Sinai area.