By Wafa Amr

RAMALLAH, West Bank, Nov 17 (Reuters) - The Palestinians have told the United States they will accept nothing less than a total freeze in Jewish settlement building ahead of a conference on statehood, a top Palestinian official said on Saturday.

Western diplomats say Israeli Prime Minister Ehud Olmert is under Western and Arab pressure to go beyond the partial freeze he was expected to announce before the U.S.-sponsored conference this month as a way to bolster Palestinian President Mahmoud Abbas.

The diplomats say Olmert sought to exempt the occupied West Bank's major settlement blocs, which Israel intends to keep under any final peace deal. Washington was cool to that idea, an Israeli source said.

Palestinian negotiator Saeb Erekat said he sent a letter to the Bush administration on Friday demanding that Israel fully meet its obligations under a long-stalled "road map" peace plan.

The road map demands a freeze on "all settlement activity", including so-called "natural growth" of existing settlements. It also calls on the Palestinians to rein in militants.

"Enough games. We want to see an end to settlement expansion and natural growth," Erekat said.

He did not make clear what the Palestinians would do if the demand was not met, putting the onus on the United States and international community to hold Israel to its road map commitments.

About 270,000 Jewish settlers live in the West Bank among 2.5 million Palestinians. The World Court has branded all the settlements on land captured by Israel in the 1967 war as illegal.

Israeli officials said Olmert would meet on Saturday with top aides who have been trying to reach understandings with Washington on settlements before the conference.

ARAB STATES

Freezing all settlement construction might help encourage key Arab states such as Saudi Arabia to attend. The Saudis are expected to take a position after a planned meeting of Arab League foreign ministers on Nov. 22, Palestinian officials said.

Palestinian officials said the Annapolis, Maryland, conference would begin on Nov. 26. The main session will take place the following day, Israeli officials said.

Olmert plans to ask his cabinet on Monday to approve the release of around 400 Palestinian prisoners, short of the 2,000 requested by Abbas.

It is unclear how any future deal would be implemented with the Palestinian territories divided. Hamas Islamists seized the Gaza Strip in June, while Abbas's Fatah faction still dominates the West Bank.

Preparations for the conference have been marred by disputes between Israeli and Palestinian negotiators over a joint document meant to address in general terms "core" issues like borders, and the future of Jerusalem and millions of Palestinian refugees.

Washington has stepped up pressure on both sides to resolve their differences, but U.S. and Israeli officials have stressed that the centrepiece of the conference will be an agreement to resume formal statehood negotiations.

Olmert and Abbas have said they hoped to reach an agreement on a Palestinian state before Bush leaves office in January 2009, though Israel insists implementation not begin until the Palestinians dismantle militant groups.

Palestinian negotiators plan to visit Washington next week to try to finalise the details.

It is unclear what impact any announcement from Olmert on settlements would have on the ground. Israel's Defence Ministry has already frozen building permits in order to increase pressure on residents to leave dozens of outposts that are considered illegal even under Israeli law. (Additional reporting by Adam Entous in Jerusalem; Writing by Adam Entous; Editing by Matthew Tostevin)

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