Nov. 11 (Bloomberg) -- In Washington, the conversation between Israeli Premier Benjamin Netanyahu and President Barack Obama was about reviving peace talks. Back home, Netanyahu’s Palestinian partner for the negotiations may soon be gone.

Palestinian Authority President Mahmoud Abbas said on Nov. 5 that he may not run for re-election in January, a step his advisers said could lead to the collapse of his administration. Aides warned of possible violence as a result of the stalemate with Israel.

“The Palestinian Authority was established to achieve a goal, and that was the two-state solution, an independent Palestinian state,” chief negotiator Saeb Erakat said in an interview yesterday. “If the Israelis have not reached the defining moment of wanting a two-state solution, who needs the Palestinian Authority?”

Netanyahu’s trip to Washington follows remarks by Secretary of State Hillary Clinton praising his proposal to limit West Bank settlement expansion. The comments angered Palestinian officials, who have repeatedly said that Israel must end all settlement building in the West Bank as a precondition to talks.

The announcement by Abbas, who has staked his career on negotiating peace, may be a tactic aimed at pressing Obama to exert more pressure on Netanyahu to freeze West Bank building, said Moshe Maoz, a professor of Islamic and Middle Eastern studies at Hebrew University in Jerusalem.

“I wouldn’t rule out the possibility that Abbas is doing this as a message to Mr. Obama, that if something is not done by the Americans then the Authority may collapse,” Maoz said.

‘Great Hazard’

The unraveling of the Palestinian Authority would be a “great hazard,” Maoz added. “Hamas can take over and troops trained by the Americans will disband or join Hamas.”

The Islamic Hamas group, which refuses to recognize Israel, seized control of the Gaza Strip in 2007, ending a partnership government with Abbas. Hamas is considered a terrorist organization by the U.S., European Union and Israel.

After Abbas announced that elections would take place on Jan. 24, Hamas said it wouldn’t allow Gazans to take part. Azzam el-Ahmad, a Fatah central committee member, said this week that the balloting would only move forward if West Bank and Gaza residents could participate. If elections aren’t held, Abbas could also choose to stay on in his position.

Opportunity for Negotiation

“The most likely scenario is that Abbas will not run for the next term as president and elections will be deferred so that he will continue to be president in near future,” said Yossi Beilin, an architect of the 1993 Oslo Accords with the Palestinians who now runs Beilink, a business consulting firm.

“If I’m not wrong, then there is still an opportunity to have intensive negotiations,” he said.

In an address this week to the Jewish Federations of North America, Netanyahu said: “I say to Mahmoud Abbas, leader of the Palestinian Authority: Let us seize the moment to reach an historic agreement, let us begin talks immediately.”

Netanyahu also repeated his call, made in June, for the establishment of a Palestinian state so long as it is demilitarized, a condition that Abbas has rejected.

Palestinian security forces in the West Bank have been successful recently in stopping attacks on Israel as well as ensuring public order and safety, measures Israeli officials have said allowed for the removal of Israeli roadblocks and helped boost the economy. The U.S. has backed the authority and has helped train its forces.

Clinton’s Praise

Clinton’s praise of Netanyahu’s readiness to restrict settlement building as “unprecedented,” was a retreat from the administration’s earlier insistence on a total settlement freeze.

“I was not the one to stand in Cairo University and say ‘real settlement freeze,’” Erakat said last week, referring to Obama’s June 4 speech at the university. “What has changed?”

It wasn’t clear who would replace Abbas, 74, also known as Abu Mazen, if elections are held and he doesn’t run. Abbas’s Fatah party has so far refused to name any alternative candidates and has called on him to remain in his post.

Marwan Barghouti, now serving a life prison sentence in Israel after being convicted of plotting terrorist attacks, has been suggested as a possible candidate, although his chances of running are stymied by the fact that he is in jail.

Prime Minister Salam Fayyad, who has issued a plan that would lead to the unilateral declaration of a Palestinian state within two years, and Fatah leader Abu Maher Ghneim have also been suggested as possible contenders.

Former British Prime Minister Tony Blair, now the envoy of the so-called Quartet group on Middle East peace, the U.S., Russia, European Union and United Nations, said a resumption of talks may help change Abbas’s mind.

“I’m still hopeful -- I’m trying to be optimistic about these things -- that we will be able to get a negotiation under way in the next few weeks, and if that happens, then obviously that changes the situation a lot,” Blair said yesterday on Israel’s Army Radio.

To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net

Last Updated: November 10, 2009 17:00 EST