<div><p>DAVOS, Switzerland (Reuters) - Palestinian Prime Minister Salam Fayyad said Thursday there was no agreement yet to resume talks with Israel, and Palestinians would have no faith in a process which failed to halt Israeli settlements.</p><p>A Palestinian official said this week President Mahmoud Abbas was studying a U.S. proposal for talks at a level below full-scale negotiations between leaders, which have been frozen for 13 months.</p><p>"We heard about low-level, mid-level, high-level (talks)," Fayyad told Reuters. "I don't think there is anything yet that has been crystallized in terms of going forward."</p><p>U.S. Middle East peace envoy George Mitchell has been trying to bring about a resumption of negotiations but Abbas has insisted first on a full halt to Israeli settlement construction in the occupied West Bank, including East Jerusalem.</p><p>He has rejected a 10-month, partial Israeli freeze, announced in November, as insufficient.</p><p>"We Palestinians stand to lose the most from a stalled peace process, but we would still like to see the process resumed in a way that would give us confidence that it can actually deliver what it should be able to deliver," Fayyad said on the sidelines of the World Economic Forum in Davos.</p><p>"I don't know when the process will be resumed."</p><p>He said Palestinians could not have any faith in peace talks if they failed to deliver "something as basic as requiring Israel to completely stop settlement activity."</p><p>TOWARD STATEHOOD?</p><p>Palestinian sources familiar with Mitchell's latest round of diplomacy said he had proposed confidence-building measures that would improve conditions in the Palestinian territories.</p><p>Israeli officials, noting that Prime Minister Benjamin Netanyahu had Sunday welcomed unspecified "new ideas" for talks from Mitchell, said their government stood ready to take part in U.S.-mediated discussions with Palestinian officials.</p><p>A year of U.S. diplomatic efforts has so far failed to relaunch talks aimed at ending the decades-old conflict through a peace treaty agreeing to the creation of a Palestinian state in the West Bank and Gaza Strip.</p><p>Fayyad, who told Palestinians in June to start building up institutions of statehood with the aim of establishing a state within two years, said they were making progress to their goal in the absence of talks with Israel.</p><p>"There is hardly a day which passes without a meaningful step being taken toward Palestinian statehood," he said. He gave no concrete example but said Palestinian governance on the West Bank was beginning to mature.</p><p>Palestinians are effectively split between the West Bank, where Abbas's Fatah faction holds sway, and Gaza, which is controlled by the Islamist Hamas movement and has been under an Israeli-led blockade.</p><p>Fayyad said the efforts in the West Bank were "something we can take to Gaza... once the siege is lifted and the separation is ended."</p><p>(Editing by Hans Peters)</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=67986075&bid=informcom" /></div><div id="copyright"><div>

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