RAMALLAH, West Bank (AFP) – Palestinian President Mahmud Abbas could resign, leading to a potential collapse of the Palestinian Authority, if US efforts to relaunch Middle East peace talks stay deadlocked, aides said on Tuesday.

This could hand Israel a major problem since a total breakdown of efforts to achieve a two-state solution could lead to pressure for Palestinians to become equal-rights citizens.

Israel has already rejected that concept, saying it would threaten the Jewish character of the state.

“President Abbas is not playing games and he is not going to hold on to the presidency just for the title,” chief Palestinian negotiator Saeb Erakat told AFP.

“If president Abbas feels that his project of establishing a Palestinian state is in danger and that Israel wants to destroy the idea of a Palestinian state, then I think he will not remain in the position of the presidency.”

“If there is not going to be a Palestinian state, then there is not going to be a Palestinian Authority,” Erakat said.

His comments came as US President Barack Obama and Israeli Prime Minister Benjamin Netanyahu held closed-door talks in Washington as efforts to relaunch peace talks floundered.

After months of backing the Palestinian call for Israel to freeze all settlement activity in order to restart the talks, US Secretary of State Hillary Clinton hailed an Israeli offer of a limited ease in construction as “unprecedented,” sparking Arab and Palestinian fury.

Although Washington has since backtracked, this has done little to allay concerns over one of the thorniest issues in the Middle East conflict.

For Palestinians — who have watched the number of Israeli settlers double since the start of the Oslo peace process in the mid 1990s, gobbling up land on which they hope to establish a state — the settlements issue is crucial.

Days after Clinton’s controversial statement, Abbas said he would not stand for re-election in a poll called for January in what aides said was a result of frustration with the US stance.

Analysts said the move also aimed at putting pressure on Washington to act more forcefully on settlements.

Another senior Palestinian official told AFP that Abbas was likely to resign if the peace process remains bogged down.

“If that happens the Authority will fall, and there will not be a Palestinian Authority or any of the institutions of a Palestinian state,” the official said, requesting anonymity.

The PA was created in the mid 1990s as part of the Oslo peace accords that gave Palestinians limited self-rule in parts of the West Bank and the Gaza Strip.

Should it be dissolved, responsibility for administering the Palestinian territories would probably again fall to Israel as the occupying power that captured east Jerusalem, the West Bank and Gaza during the 1967 Six-Day War.

Palestinian officials have in recent weeks said that if the peace efforts remain stalled, they could resort to abandoning their quest for an independent state and instead demand equal rights within Israel.

“If they want to kill the two-state solution, then maybe it’s the moment of truth for the Palestinian leadership… (to) tell his people the truth that with the continuation of settlement activity, the two-state solution is no longer an option,” Erakat told reporters last week.

“And maybe Palestinians should re-focus their attention to the one-state solution where Muslims, Jews and Christians live as equals,” he said.