“It’s clear that the two sides are so different; in content, in approach, that it’s hard to talk about a peace agreement within a year,” Lieberman told Israeli public radio.

The two sides, due to relaunch direct talks in Washington next week after a 20-month hiatus, have been negotiating since 1993, when they signed interim accords after secret peace talks in Norway, but have yet to reach an agreement leading to Palestinian statehood.

“What have we been doing for the 17 years since Oslo?” Lieberman asked rhetorically. “Suddenly we’re going to reach a peace agreement within a year? I think that the more we can lower expectations the healthier it will be.”

Lieberman said that it would be unacceptable to extend a slowdown on West Bank settlement construction.

Lieberman, whose Yisrael Beitenu party is a major partner in the governing coalition, told Israel Radio he realized that resuming settlement construction would antagonize both the US and the Palestinians. But he said that maintaining tight restrictions on building would “punish” tens of thousands of people in the settlements.

Resuming construction in the settlements could spell disaster for the peace talks before they even get off the ground. But leaving the moratorium in place could cause Netanyahu’s hard-line Israeli government to crumble.

Government spokesman, Mark Regev, refused to say what Netanyahu would do after the settlement slowdown expires.

Meanwhile, Israeli occupiers warned on Wednesday that Netanyahu would face his “day of judgment” if he caves in to pressure to further limit settlement construction in the West Bank. “This is not a time to mince words as this is literally a day of judgment for our prime minister and government,” said Naftali Bennett, head of Yesha, the main association of settlers in the Israeli-occupied Palestinian territory.

Yesha warned in a letter to Netanyahu of “serious diplomatic and political implications” if he reneges on his promise to resume issuing building permits for settler homes when a partial, 10-month moratorium ends on Sept. 26.

Under intense US pressure, Netanyahu imposed the slowdown last November to draw the Palestinians to the negotiating table. The move barred approval of new housing construction, though hundreds of homes already being built were allowed to be completed.

Palestinian President Mahmoud Abbas has expressed strong reservations about negotiating with Netanyahu, fearing the talks will be a waste of time and that his already poor public standing could suffer further damage.

The issue of settlements is one of the thorniest in the Middle East peace process and is expected to figure prominently at the new round of direct Israeli-Palestinian peace negotiations starting in Washington on Sept. 2.

The Palestinians initially insisted they would not sit at the negotiating table without guarantees the moratorium on building permits be extended.

But no such guarantee has been made public in statements from the US administration and the Middle East peace Quartet when they announced the new round of negotiations.

Netanyahu faces Palestinian and international calls for a freeze on settlement construction. But the leader of a center-right ruling coalition is also under strong pressure, including from within his Likud party, to clear the way for construction of more settler homes in the West Bank.