Israel tries to avoid showdown with President Obama over settlements

MAALEH ADUMIM, West Bank - Israel scrambled Tuesday to sidestep President Barack Obama's demand for a West Bank settlement freeze with a diluted counteroffer to Washington.

But Prime Minister Benjamin Netanyahu's compromise — to take down some squatter camps in exchange for permission to keep building in established settlements — was quickly rejected by hard-liners in his own coalition.

The dispute underscored Netanyahu's difficult juggling act. He's trying to avert a crisis with the U.S. over settlements, while keeping his pro-settlement governing coalition intact and forging ahead with construction, such as the rows of apartment blocks going up in this rapidly expanding Israeli city in the West Bank.

However, Obama and U.S. Secretary of State Hillary Rodham Clinton have spoken in recent days about halting all settlement activity without exception, suggesting Netanyahu may have little room to bargain.

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