The 10-month-long Israeli moratorium on settlement construction will expire this Sunday. Settlers in the West Bank are preparing to resume building immediately while the Israeli government is indicating it is willing to make a compromise under American and Palestinian pressure. Our Jerusalem correspondent Xiao Yu has more.

In the settlement called Shilo between Jerusalem and the West Bank city of Nablus, Israel Medad, an Israeli spokesman for the settlement issue, stands in front of a blueprint for a new building project for 12 apartment units in the West Bank. A notice posted says construction will begin immediately after the moratorium on building ends.

Medad told CRI that the last 10 months during which there has been a moratorium on settlement construction have been meaningless, and the freeze must not be extended.

"The last nine months, going on 10 months now, the engineering department has been working overtime. Hundreds of authorizations, plans for construction, new buildings added—all the works have been done. All the files of every single building are waiting for the end of the thing (moratorium) and to be presented for final approval."

Local media report there are about two-thousand housing units in the settlements that have all the necessary approvals in order to begin construction.

The more than 120 settlements scattered around the West Bank and east Jerusalem are home to some 500,000 Israelis, and the figure is increasing day by day. Those settlements have divided the West Bank into hundreds of small parcels of lands where Palestinians live.

The roads linking the settlements are controlled by the Israeli army, which causes hassles and delays for the Palestinians when they travel between their cities and villages.

Here is Loai Mazayan, a resident of Ramallah.

"There are more than 4 settlements on the way from Ramallah to Nablus. Along the way there are a lot of checkpoints. Well, usually during a good time it would take 20-30 minutes where there are no settlers on the street. But if there are settlers on the street, it will be between two and three hours. It's like they stop you, and they jump on the car and people, protected by the Israeli army. And also, not only do they throw rocks, they hold guns. What can the Palestinians do when settlers holding guns and their little kids holding sticks jump on the cars and break their cars? We can do nothing."

The demographic complexity on the ground makes negotiations extremely difficult in terms of how to determine the border between Israel and the future state of Palestine.

The Palestinian Authority has threatened to quit the ongoing direct talks if Israel does not extend the moratorium after Sunday.

But Professor Shlomo Avineri, a former director general of the Israeli Ministry of Foreign Affairs, told CRI that no Israeli government will risk its own survival to meet Palestinian demands.

"I do not think this government or any Israeli government at the moment can agree with the Palestinians on borders. Because it's not borders, it's half a million people. My hunch is as it's in the interests of the Israelis and the Palestinians and the Americans not to see a blowup at the end of September, they'll find a formula. What I'm really suggesting is that it's possible for the negotiations to go on and on and discussing non-core issues which are still important to narrow the gap, and this is a holding operation for the negotiation which is important."

An unnamed senior Israeli official said on Friday that Israel was prepared to make a compromise acceptable to all parties, but stressed that there could not be "zero construction" in the settlements.

Palestinian President Mahmoud Abbas also has adopted a softened tone on the issue.

Mahdi Abdul Hadi from a Palestinian think-tank based in east Jerusalem told CRI that Abbas, or Abu Mazen as he is called by Palestinians, has no decisive power on the core issues of the Middle East conflict.

"Abu Mazen has no decision to make today. The decision he'll forward to [U.S. President Barack] Obama and the Arab League as he will seek political survival. Changing his tone because what happened in Silwan is very serious, the killing of the Arab people, the wide religious fundamentalism in Jerusalem, and the settlers' atrocities in the West Bank."

An Arab was shot to death earlier this week by an Israeli citizen in the East Jerusalem community of Silwan. The killing caused days of riots and conflicts in the area.

Mahdi Abdul Hadi says the peace process will continue after the settlement crisis, but without any tangible progress in the near future.

As the Sunday deadline approaches, it will soon be seen what the Israeli solution under the pressure of the United States and the Arab world will look like.

For CRI , I'm Xiao Yu in Jerusalem.