Israel and the Palestinian Authority (PA) will meet on Sunday, in yet another attempt to save peace talks, a PA official told AFP.
Chief PA negotiator Saeb Erakat would meet his Israeli counterpart, Justice Minister Tzipi Livni and Prime Minister Benjamin Netanyahu's
special envoy Yitzhak Molcho during the afternoon, the official said, speaking on condition of anonymity. There was no confirmation from the Israeli side.
The teams last met on Thursday in a session presided over by US envoy Martin Indyk, who has since returned to Washington for consultations while Israel observes the seven-day Passover holiday starting at sunset on Monday.
After a dramatic series of negotiations, Israel officially cancelled the fourth release of convicted Arab terrorists last week and issued harsh sanctions on the PA over its unilateral diplomatic moves to apply for 15 UN-linked agencies.
In response, the PA issued a number of extreme demands against Israel, including the release of over 1,000 terrorists and a withdrawal to 1949 Armistice lines - essentially demanding concessions on all key issues before negotiations even continue.
An Israeli official announced on Thursday that Israel would freeze the transfer of taxes to the PA, suspend participation with the PA to develop a gas field in the sea off of Hamas-controlled Gaza, and put a cap on PA deposits in Israeli banks.
These sanctions followed other punitive measures and sanctions that Israel took against the PA after it unilaterally applied to join 15 international conventions in breach of the conditions of the peace talks.
The decision sparked concern in Washington.
"We've seen these press reports, but we have not seen an official public announcement by the Government of Israel," state department spokeswoman Jen Psaki briefed reporters on Friday.
"That said, we would regard such a development as unfortunate. We believe that the regular transfer of the Palestinian Authority's tax revenues and economic cooperation between Israel and the Palestinian Authority has been beneficial and is important to the well-being of the Palestinian economy."
Israel has not yet confirmed whether or not it would participate in a deal to release more terrorists and enact a construction freeze, in exchange for continuing peace talks and releasing Jonathan Pollard.