Israel: Stop Palestinian incitement

Israel has dismissed US warnings of withholding loans to the country.

Officials, are stressing that it's the Palestinians who are responsible for the deadlocked negotiation process and, therefore, THEY should be pressured instead.

At his weekly Sunday cabinet meeting, Prime Minister Benjamin Netanyahu said that stopping Palestinian "incitement" is a condition, not just to renew the peace talks, but to complete the discussions and achieve a lasting accord.

Another senior cabinet member says Washington's threats to withhold support on loan guarantees to Israel should be ignored.

Earlier, the American administration laid out a major shift in its Mideast strategy by suggesting both sides work on defining borders for a Palestinian state.

Israel's Prime Minister Benjamin Netanyahu attends the weekly cabinet meeting in his office in Jerusalem January 10, 2010. REUTERS/Baz Ratner