Both Israeli and American officials said that final borders could not be negotiated in three months, but they hoped enough progress could be made on exchanging settlement blocks for other land, as well as other significant issues, so that a settlement freeze would no longer be a Palestinian demand for moving forward.
Obama administration officials said they believed that the Israelis and Palestinians could make enough progress on the contours of a Palestinian state to largely set aside the dispute over settlements.
Under the most likely outcome, said a person close to the negotiations, the two sides would agree that several large West Bank settlement blocks would be kept in Israeli territory, and Israel would exchange a commensurate amount of land to compensate the Palestinians for that territory.
Drawing the exact border lines could be left for later in the negotiations, but a general agreement on the shape of a state would make the settlements recede in importance, this person said. The two sides would not have to settle delicate issues like the status of Jerusalem in the first 90 days. The point of the extension, the official said, is to allow the negotiations to gain enough traction to continue without further disruption.