Kerry extends Israeli stay to engage in shuttle diplomacy

US secretary of state John Kerry has issued a stark warning of more violence and deepening isolation in store for Israel if Israeli and Palestinian negotiators fail to clinch a peace deal next year.

On Friday morning Mr Kerry holds his third meeting in two days with Israeli prime minister Binyamin Netanyahu, after extending his stay in the region to engage in shuttle diplomacy to get the negotiations back on track.

In an interview with Israel’s Channel 2 television, Mr Kerry warned Israel would pay a heavy price in the absence of a diplomatic breakthrough.

“I mean, does Israel want a third Intifada (Palestinian uprising)? If we do not find the way to find peace, there will be an increasing isolation of Israel, there will be an increasing campaign of delegitimisation of Israel that has been taking place on an international basis.”

Despite the warning, Mr Kerry reported on Thursday that the negotiations had made “significant progress” in some areas, but he failed to be more specific as the parties are sworn to secrecy for the duration of the negotiations.

Mr Kerry took the decision to step up his personal involvement after Palestinian officials warned that Israeli settlement expansion in the West Bank had left the talks in a “severe crisis.” Mr Netanyahu responded by accusing the Palestinians of creating a “false crisis” as they were aware that Israel had refused to agree to freeze settlement building before the talks were renewed in July.

Mr Kerry's shuttle diplomacy over the last few days has also included US ally Jordan, which will be directly impacted by any peace agreement between Israel and the Palestinians. Amman is particularly concerned over border arrangements between Jordan and a future Palestinian state, the fate of Palestinian refugees and Jerusalem's holy sites, over which the Hashemite kingdom has acted as custodian.

In a separate development, Israeli officials on Thursday rejected out of hand allegations that Israel was responsible for the murder of Palestinian president Yasser Arafat in 2004, the day after Swiss scientists said they found large levels of radioactive polonium in his bones.

Silvan Shalom, who served as Israel's foreign minister in 2004 when Mr Arafat died, told Israel radio that if Israel had wanted to kill Mr Arafat they would have denied him permission to leave his besieged Ramallah compound for urgent medical treatment in France.

“What people said about Arafat, that Israel poisoned him, is complete nonsense and a lie. We never took a decision to harm him physically. We did talk about deporting him. If we had wanted to harm him physically, the simplest thing would have been not to let him go to Paris.”

Mr Shalom, currently Israel’s energy minister, described the report into Mr Arafat’s death by poisoning as superficial and unpersuasive, adding that if the PLO leader was poisoned “it certainly wasn’t by Israel.”

Asked if the government discussed or even contemplated killing the iconic Palestinian leader, Mr Shalom repeated: “No, under no circumstances.”