The deadlock over Jewish settlements appeared to be going down to the last minute, though there were small signs from the Israeli and Palestinian sides that a deal would be reached.
Israeli Prime Minister Benjamin Netanyahu has said he will not extend the slowdown on construction he imposed exactly 10 months ago. The Palestinians, opposed to all settlements built on territories they claim for a future state, have said they will quit negotiations if Israel resumes building.
Seeking to lower the tensions, Netanyahu issued a statement calling on settler groups "to show restraint and responsibility today and in the future — just as they showed restraint and responsibility during all 10 months of the new construction suspension." Netanyahu also instructed his Cabinet ministers not to speak to the media.
Settler leaders rejected Netanyahu's call, however, and vowed to proceed with a symbolic groundbreaking ceremony later in the day at Revava, a settlement deep inside the West Bank, marking the end of the construction restrictions.
The Israeli leader imposed the slowdown last November in a bid to draw the Palestinians back to the negotiating table.
The Palestinians initially rejected the offer as insufficient because it contained loopholes that allowed thousands of West Bank apartments to be built. But in recent weeks they have said the measures must remain in place if they are to continue negotiations.
Netanyahu, under heavy pressure from his pro-settler coalition partners, has said he will not extend the restrictions. The deadlock has created the first crisis in the new round of Mideast talks, just weeks after they were launched at the White House.
US Secretary of State Hillary Clinton held talks with senior Israeli and Palestinian officials over the weekend in hopes of forging a deal. Before boarding a plane back to Israel, Israeli Defense Minister Ehud Barak told the BBC late Sunday that chances of success were "fifty-fifty." The chief negotiators, Saeb Erekat for the Palestinians and Yitzhak Molcho for the Israelis, remained in the US, leaving a window open for a last-minute agreement.
Several thousand settlers were expected at Sunday's rally in the Revava settlement, where they planned to count down the hours to the slowdown's end at midnight. Organizers included a lawmaker from Netanyahu's own Likud Party.
In Efrat, a settlement in the West Bank near Jerusalem, resident Moshe Polack said the slowdown was "a mistake to begin with." "The whole thing is really a show of weakness on the part of the Israeli government," he said.
Despite the tensions, there have been signs of compromise.
Senior Palestinian officials told The Associated Press last week they were prepared to show "some flexibility." In a newspaper interview published Sunday, Palestinian President Mahmoud Abbas said he would not immediately withdraw from peace talks if construction resumes. Instead, he told the pan-Arabic daily Al-Hayat that he would convene the Palestine Liberation Organization and the Arab League to formulate a joint response.
Abbas told the newspaper the Palestinians would not respond with violence. "We won't go back to that again," he said.
Netanyahu, for his part, has said Israel would not necessarily resume construction in full.
The Palestinians oppose all Israeli construction in the West Bank, saying it cripples plans for a viable Palestinian state. Some 300,000 Israelis live in West Bank settlements, scattered among 2.5 million Palestinians.
Another 180,000 Israelis live in east Jerusalem, the section of the holy city claimed by the Palestinians.
Israel says the fate of the settlements should be determined through negotiations.
Abbas is threatened internally by his rivals from the Islamist Hamas group, which rules the Gaza Strip and rejects any recognition of Israel. Abbas "should withdraw immediately from the negotiations" and concentrate on unifying Palestinians to fight Israel, Hamas spokesman Fawzi Barhoum told the AP in Gaza on Sunday.
In practice, the slowdown has brought about only a slight drop of about 10 percent in ongoing construction in the settlements. But it has significantly cut new housing starts — by about 50 percent, according to the dovish Israeli group Peace Now, meaning it could have far more impact if the restrictions remain in place.
Around 2,000 homes can begin construction immediately once the slowdown ends, Israeli Cabinet minister Limor Livnat told Israel Radio on Saturday.
Dani Dayan, leader of a settler umbrella group, said the end of the freeze was not a time to celebrate.
"It's time to roll up our sleeves and get to work," he said in a TV interview, stressing it was unlikely there would be a sudden explosion in construction after midnight.
"Whoever thinks that tomorrow there will be some kind of earthquake and there will be bulldozers wherever you look is wrong, that is not going to happen. It's a process and takes a while," he said.
