Mideast Talks Near Impasse Over Settlements, History : Peace process: Palestinians say negotiations are stalled unless Israel discusses occupied territories.

The Middle East peace process lurched toward deadlock Wednesday with Israelis and Palestinians trading ultimatums over Jewish settlements in the occupied territories and Israel and Syria even disagreeing about the facts of their shared history.

Although they denied that they might walk out over the issue, Palestinian participants said that no progress can be made until Israel agrees to stop building settlements in the West Bank and Gaza Strip. Israel flatly refused even to discuss settlements until the start of “final status” talks.

“The Israeli-Palestinian negotiations . . . were on a head-on collision course,” Palestinian spokeswoman Hanan Ashrawi said in describing the first two days of talks. “We were unable to achieve anything.”

But Israeli delegates agreed to postpone their return home, scheduled for Wednesday, until today to permit more meetings with the Palestinians and Jordanians.

The current round of Israel-Syria and Israel-Lebanon talks ended Wednesday with no date set to reconvene.

Ashrawi said that the Palestinians consider a settlement freeze to be “a prerequisite for the success of negotiations.” Zalman Shoval, Israel’s ambassador to the United States, said that Israel will not accept any “preconditions.”

Further, he said, Israel will not discuss settlements at all during the current phase of the negotiations, which are intended to establish conditions for an “interim” period of limited Palestinian self-government in the West Bank and Gaza Strip.

Shoval said Israel will not negotiate over settlements until talks begin on the final status of the occupied territories. Under an agreed timetable, the final-status talks will begin three years after the interim self-governing authority is established.

The Palestinians already have introduced their version of self-government, which calls for elected Palestinian executive, legislative and judicial branches to govern all territories that were occupied in the Six-Day War in 1967--the West Bank, Gaza Strip and East Jerusalem.

Shoval described the Palestinian plan as “a starting proposal.” He said it is not acceptable as it stands but that Israel is willing to negotiate about it.

Meanwhile, Israel and Syria continued their now-familiar dialogue in which each side reiterated positions to the other without trying to reach a compromise.

After Tuesday’s talks, the heads of the Israeli and Syrian delegations each complained about the other’s distortion of history.

“We discovered that . . . history in their eyes is not just different but the converse of our understanding of the facts of history,” Yossi Ben-Aharon, Israel’s delegation chief, said. “We were the ones who were attacked three times by Syria and, when we had the guts to defend ourselves, . . . we took some territory on the Golan Heights.”

But Mouffac Allaf, Syrian delegation chief, said Damascus sought an agreed interpretation of the U.N. resolution adopted after the 1967 war “and we were shocked and surprised . . . when we came . . . to the question (of the) inadmissibility of acquisition of territory by force . . . to hear from them that that principle . . . is addressed to Syria and not to Israel.”