In an emergency meeting Wednesday night between U.S. envoy Martin Indyk and the Israeli and Palestinian negotiating teams, both teams issued new demands. The meeting, which ran into the early hours of Thursday morning, was aimed at pulling the peace process out of the crisis precipitated by U.S. Secretary of State John Kerry's decision to cancel his scheduled visit to the region and place the responsibility for a solution in the hands of Israel and the Palestinians. Participants at the emergency session dubbed it a "tough battle."

Justice Minister Tzipi Livni, who represented Israel in the meeting, submitted a formal request to the Palestinians, asking them to withdraw their application to join 15 international conventions. The Palestinian negotiating team, headed by Saeb Erekat, demanded deliberations on the core issues still outstanding, including recognition of the 1967 borders, as well as recognition of East Jerusalem as the future capital of Palestine. "We didn't come here to discuss packages, we came to discuss the core issues," Erekat said in the meeting.

A senior Israeli official stressed that if the application is not rescinded and the negotiations are not extended, Israel will take a number of punitive measures against the Palestinian Authority.

A second senior Israeli official informed about what was discussed at the meeting said the application to the United Nations agencies had created new conditions, in light of which Israel would not be able to release the 26 Palestinians of the fourth prisoner release.

A third senior Israeli figure said that staffers in the Prime Minister's Office had begun deliberating over the possible sanctions that could be taken in the event the Palestinians persist in their applications to the UN. Among the possibilities that are on the table are suspending the transfer to the PA of taxes collected by Israel on behalf of the Palestinians, moving to collect the hundreds of millions of shekels the PA owed the Israel Electric Corporation and imposing restrictions on PA activities in Area C of the West Bank, which under the Oslo Accords is under exclusive Israeli control.

In the meeting, Livni told Erekat that the Palestinians' unilateral move was carried out at a time when the Israeli government was making a genuine, coordinated effort to reach a deal on extending the negotiations that was to include the prisoner release, and clarified that the fourth prisoner release would not be possible in light of the move.

"You knew that well when you acted," Livni told Erekat. "The agreements on the prisoner release were subject to the fulfillment of the Palestinian promise not to turn to the UN through the end of April. No one-sided move will advance the negotiations, and you must withdraw your requests and return to the negotiating table."

The Palestinian representatives said in response that they had not come to the meeting in order to discuss the fourth prisoner release, adding that this issue had been agreed upon with the United States and that Israel violated that agreement.

"If you escalate the situation against us, we will pursue you as war criminals in all the international forums," Erekat told Livni in response to her threat of Israeli sanctions against the Palestinians.

Palestinian demands

The Palestinians issued six main demands in connection to the core issues at the meeting:

1. A letter of commitment from Benjamin Netanyahu, in which the Israeli prime minister recognizes the 1967 borders and recognizes East Jerusalem as the capital of the Palestinian state.

2. The release of 1,200 Palestinian prisoners, including Marwan Barghouti, Ahmed Sa'adat and Fuad Shubaki.

3. Implementation of the border crossing agreements and an end to the blockade of the Gaza Strip.

4. The return of the Palestinians who were expelled from the West Bank in 2002 after a siege in Bethlehem's Church of the Nativity.

5. A freeze on construction in Jewish settlements, including Jerusalem, the reopening of Palestinian institutions in East Jerusalem and family reunification for 15,000 Palestinians.

6. Prohibition of the entry, for the purpose of carrying out arrests and assassinations, of Israeli security forces into areas of the West Bank that are under Palestinian control, and the transfer of Area C to Palestinian control.

A senior Palestinian figure told Haaretz that part of these demands are based on past agreements that were included in the road map and agreed with former Prime Minister Ehud Olmert, and therefore cannot be considered new conditions that could constitute a pretext for ending the negotiations. If Israel seeks peace, it can undoubtedly accept these terms, he said.

"If we had settled the issue of borders," Shtayyeh said, "we could have avoided several major obstacles.

Erekat later denied that his team presented this list of demands to Israel.

Erekat told associates that this list came from Fatah officials, not from him or his staff, and did not represent the official Palestinian negotiating position. He said that while he did tell Indyk and Israeli negotiators on Wednesday night that the Palestinians wanted to discuss the dispute's core issues, he did not go into detail nor make the demands reported.

Meanwhile, on Thursday Erekat met with members of Fatah in Ramallah and briefed them on the conditions issued by the Palestinian team. The Palestinian Maan News Agency quoted Erekat as saying that the PA's joining the 15 international agency was the first, modest step made by the Palestinians in an effort to return to the negotiating table.

Earlier in the day, a senior Palestinian official told Haaretz that the peace process seems to have regressed by more than a decade. "The Israeli spoke in a tone of the masters, and as if they wanted to turn the occupation into a mandate, with the PA as the subcontractor. The Palestinians said No to this. We came to negotiate over the 1967 borders, including Jerusalem, the Jordan Valley, the refugees and water."

An informed Palestinian source described the current state of the peace process as comparable to the eve of the 2000 Camp David summit. "They should talk about the core issues, since the discussion of anything else is merely technical and aimed only at drawing out the process for the sake of the process, not for the sake of peace," the source said.

On his Facebook page, Israeli Economy Minister Naftali Bennett said in response to the Palestinian demands that Jerusalem will never be the Palestinian capital.