Release of Israeli spy Jonathan Pollard back on agenda as Mideast talks falter

US Secretary of State John Kerry is closer to a deal that would rescue the faltering Middle East peace talks, pushing a formula that would include the release of convicted US spy Jonathan Pollard and freedom for hundreds of Palestinians held by Israel, an official close to the negotiations said yesterday.

The deal would not include a freeze on construction in Jewish settlements in the West Bank as the Palestinians have demanded but would envisage Israel committing to show "great restraint" and not issue new housing tenders.

The remarks were the first sign of a breakthrough after weeks of arduous US efforts meant to keep the negotiations afloat past a late-April deadline. The talks were on the verge of collapse after a planned Palestinian prisoner release did not take place as scheduled last week.

In a sign of the urgency, Kerry flew unexpectedly to Israel from Europe on Monday, where he met Israeli and Palestinian officials in a bid to salvage the negotiations. Pollard's release was discussed as part of a deal that would extend the talks. After a stop in Brussels, the State Department said Kerry would return to the region today for further talks with the Palestinians.

The Palestinians gave the emerging proposal a cool reception, saying it fell far short of their demands for a complete halt to settlement construction and the freedom for 1,000 prisoners of their choosing.

The inclusion of Pollard, a former United States naval intelligence analyst who was convicted of spying for Israel, is the most surprising element of the deal and reflects the importance - and desperation - that Kerry has put on continuing the talks.

"According to the emerging deal, Pollard would be released before the Passover holiday," said the official. Passover begins on April 14.