Israeli, Palestinian Negotiators Meet Wednesday with U.S. Envoy

Israeli and Palestinian negotiators are to meet again Wednesday with U.S. mediator Martin Indyk in a bid to try and save the peace process from crumbling, a Palestinian official said.

Indyk would travel to the region to oversee the meeting, the second three-way talks since last Thursday, said the official who requested anonymity.

There was no immediate confirmation from officials in Israel, which observes the seven-day Jewish holidays of Passover from sunset on Monday.

Chief Palestinian negotiator Saeb Erakat met on Sunday his Israeli counterpart Tzipi Livni and Prime Minister Benjamin Netanyahu's special envoy Yitzhak Molcho on Sunday.

That meeting was "difficult" and there are still "big gaps" between the sides, the Palestinian official said.

The talks hit an impasse two weeks ago when Israel refused to release as agreed a group of Palestinian prisoners and the Palestinians retaliated by seeking accession to several international treaties.

The peace process suffered a new blow last week after Israel said it would freeze the transfer of duties it collects on behalf of the Palestinians in retaliation for their diplomatic offensive.

The monthly 80 million euros ($111 million) in taxes collected by Israel represents about two-thirds of the Palestinian Authority's income.

Israel also reportedly plans to suspend its participation with the Palestinians in developing a gas field off the Gaza Strip and to put a cap on Palestinian deposits in its banks.

Direct peace talks were kick-started in July by U.S. Secretary of State John Kerry, who shuttled back and forth to the region to revive a peace process that had been dead for three years.

They have since hit obstacle after obstacle and further deteriorated just weeks ahead of an April 29 deadline.