RAMALLAH, West Bank - The Palestinian president on Wednesday resisted U.S. pressure for a resumption of peace talks with Israel, repeating his demand for a complete halt to West Bank settlement building before negotiations.

Mahmoud Abbas also offered no clarity over his own political future by saying he did not want to talk again about his declared wish not to run for a second term as president of the Western-backed Palestinian Authority.

Abbas's announcement last week that he did not want to stand again for the post reflected his anger with the United States over what Palestinians see as its failure to put pressure on Israel to halt settlement building in the West Bank.

Addressing a rally to mark the fifth anniversary of the death of Yasser Arafat, Abbas said that for peace talks to resume, Israel must recognize the terms of reference.

We cannot go to negotiations without a framework. And we say the framework is U.N. resolutions, meaning a return to the 1967 borders, Abbas said, referring to Israel's borders on the eve of the conflict that changed the map of the Middle East.

Also, we want a full stop to settlements, including natural growth and in Jerusalem, the 74-year-old leader said.

Without that, I won't accept. I won't accept, he said, to cheers from a crowd of thousands waving a sea of flags. Israeli Prime Minister Benjamin Netanyahu has urged Abbas to begin talks without any conditions. That position is now supported by U.S. President Barack Obama, who made a resumption of Middle East peace talks one of his priorities and at first also insisted on a prior freeze on Israeli settlements.

Netanyahu has ruled out going beyond a partial limitation on Jewish settlement building in areas of the occupied West Bank not annexed by Israel to its Jerusalem municipality, and Obama has backtracked to calling for restraint on the activity.

Echoing Netanyahu's speech on Monday to U.S. Jewish leaders in Washington, White House chief of staff Rahm Emanuel told the same forum on Tuesday that Israeli-Palestinian talks, suspended since December, should get under way without preconditions.

No one should allow the issue of settlements to distract from the goal of a lasting peace between Israel, the Palestinians and the Arab world, Emanuel said.

Netanyahu was meeting French President Nicolas Sarkozy on Wednesday for talks that will include current peace prospects.

ISRAEL DISFIGURES TWO-STATE VISION

Palestinians say the settlements which pepper the West Bank destroy the possibility of setting up a viable state. Abbas said Israel was disfiguring the two-state solution. They are putting obstacles in its way. They are trying to remove this concept. What do they want?, he said.

Abbas has built his political career around negotiating a peace deal with Israel. But talks have been suspended for 10 months since Israel's offensive in the Gaza Strip, which is ruled by Abbas's rivals in the Hamas movement.

Committed to armed struggle against Israel and branding Abbas a sell out, Hamas seized control of the Gaza Strip in 2007, splintering the Palestinian national movement.

Abbas said his hand was extended for reconciliation with Hamas, urging it to sign an Egyptian proposal to end the division. Instead of trying to eliminate each other, let us unite to be face the occupation together, he said.

But Hamas spokesman Sami Abu Zuhri said Abbas was only maneuvering.

The deep Palestinian division is one of the factors stacking the odds against the legislative and presidential elections that Abbas called for January 24. Hamas, disputing Abbas's legitimacy, has banned the vote in Gaza. The uncertainty surrounding the election and Abbas's declaration that he does not want to run in it have raised many questions over the outlook for Palestinian politics.

Many analysts see Abbas's declaration as a tactic to trigger U.S. pressure on Israel over settlement building. On this occasion, I don't want to talk again about my wish not to run in the upcoming elections, said Abbas. The Fatah movement and the Palestine Liberation Organization (PLO), both of which Abbas heads, have called on him to stay on.

As I said in my speech, there will be other decisions ... that I will take in light of coming developments, he said.

Regardless of the fate of the Palestinian presidency, Abbas is seen remaining at the heart of Palestinian politics due to his position as head of the more powerful PLO.

(Additional reporting by Ali Sawafta and Tom Perry in Ramallah and Nidal al-Mughrabi in Gaza; Joseph Nasr in Jerusalem and Jeffrey Heller; Writing by Tom Perry; Editing by Samia Nakhoul)

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