The Palestinian Prime Minister, Salam Fayyad, boycotted a planned meeting with Prime Minister Benjamin Netanyahu on Tuesday.
The meeting, which was the first high-level contact between Israeli and Palestinian representatives since talks in Amman broke down nearly three months ago, was convened so that the Palestinian Authority could deliver its conditions for a renewal of negotiations.
Instead of Mr Fayyad, the PA was represented by chief negotiator Saeb Erekat and the head of the intelligence service, Amjad Farej, one of Palestinian President Mahmoud Abbas's closest advisers. No official reason was given for Mr Fayyad's absence but Palestinian sources explained that he did not want to attract internal criticism by meeting the Israeli Prime Minister on Palestinian Prisoner Day.
At the meeting, the Palestinian delegation delivered a letter from Mr Abbas demanding that Israel commit to holding negotiations on the basis of the pre-1967 borders and freeze all settlement building.
If Israel does not accept the conditions, the PA will see itself free to make decisions as a sovereign state. Israeli officials believe that the PA is after an international "alibi" that will allow it to resume its attempts to gain unilateral recognition of an independent state from the United Nations.
Following the meeting, the two sides issued a joint statement saying that "Israel and the Palestinians are committed to reaching peace" and that Mr Netanyahu's emissary, Yitzhak Molcho, will deliver Israel's answer in two weeks to President Abbas in
Ramallah.
The Israeli cabinet is overwhelmingly against agreeing to a second freeze on settlement building and its answer is expected to include the government's proposals for future borders and security arrangements between the two states.