Israel’s Prime Minister Benjamin Netanyahu left for Washington on Tuesday for the first direct peace talks with the Palestinians in nearly two years.

Israeli President Shimon Peres said a peace deal remained in sight despite the threat of a Palestinian pullout from the negotiations amid uncertainty over the building of future Jewish settlements.

“The prime minister goes to Washington determined to represent his people, to implement an agreed solution here, namely to have a two-state solution, a Palestinian demilitarised state,” Peres told reporters in Jerusalem.

But Palestinian Authority leader Mahmoud Abbas and his Fatah party have warned that the talks, which begin on Thursday, risk collapse unless Israel extends a freeze on settlement building in the West Bank.

Palestinian Civil Affairs Minister Hussein Al-Sheikh said the position was “clear.”

“We want Israel to respect the borders for a Palestinian state established in 1967 and an end to the occupation,” he told euronews in an interview.

A moratorium on new housing expires on September 26. Israel has no given no indication as to whether it will be renewed.

Other contentious questions still to be resolved by the two parties include the status of Jerusalem and the right of return for Palestinian refugees.

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