(Fixes 10th paragraph to show PLO said it will extend Abbas term but has not done so yet, adds details)

Nov 17 (Reuters) - Seeking to break a stalemate in Middle East diplomacy, Palestinian officials have said they may seek backing from the U.N. Security Council to recognise statehood without an agreement with Israel.

European Union foreign ministers discussed the Palestinian plan on Tuesday, but the organisation's foreign policy chief, Javier Solana, said in Brussels that the idea seemed premature [ID:nLH621257].

Here is the state of play on key issues affecting Israel and the Palestinians and the factors to watch in the coming weeks:

* Israeli Prime Minister Benjamin Netanyahu has said any unilateral move by the Palestinians could unravel past agreements [IDnLF271927].

Gilad Erdan, a right-wing cabinet minister, has said Israel may annex more West Bank land if Palestinians declared a state without concluding a peace agreement.

Any effort by the Palestinians to press on with the initiative could further complicate efforts to resume stalled peace talks. Israel could lobby Washington and Europe for pledges to veto any Palestinian bid to declare statehood, which may put the Jewish state under new pressure to curtail Jewish settlement building so that peace talks may resume.

* Israel has consistently rebuffed U.S. calls to halt Jewish settlement construction in occupied land, while Palestinians have demanded a building freeze as a condition for renewing peace talks. In a latest act of defiance, Israel approved a plan on Tuesday to expand the Gilo settlement in East Jerusalem over U.S. objections [IDnLH580253].

Watch for further attempts by Netanyahu's right-wing allies to press for more settlement expansion or object, possibly violently, to government attempts to try and curb the enclaves' growth by dismantling structures put up on occupied land without government authorisation.

Netanyahu voiced concern on Tuesday about a growing number of incidents involving Israeli soldiers protesting the dismantling of settler outposts, a development that raised fears of military rebellion against any future land-for-peace deal with Palestinians [IDnLH579927].

* Officials in the Palestine Liberation Organisation said they would extend Mahmoud Abbas's tenure as Palestinian president after an election commission postponed a vote that had been scheduled for Jan. 24, in response to Hamas Islamists who said they would ban the vote in the Gaza Strip. Hamas disputes the legitimacy of Abbas's rule [IDnLH102698].

The rift between Fatah and Hamas, shunned by Israel and the West, is an additional obstacle to achieving the Palestinian goal of statehood. There are no signs as yet that Egyptian-mediated efforts to reconcile the Palestinian factions will yield results in the near future, but there could be new efforts to schedule a fresh round of talks between the parties.

* Egypt has pressed ahead with efforts to mediate a prisoner swap between Israel and Hamas, exchanging captive Israeli soldier Gilad Shalit for hundreds of Palestinian prisoners in Israeli jails.

Israel insists on Shalit's release as a condition for loosening a blockade of the Gaza Strip that prevents cement, steel and other rebuilding materials from reaching the coastal enclave, parts of which were devastated by a war in December in which more than 1,300 Palestinians and 13 Israelis were killed [IDnLQ116463]. (Writing by Allyn Fisher-Ilan, Editing by Dominic Evans) (For blogs and links on Israeli politics and other Israeli and Palestinian news, go to http://blogs.reuters.com/axismundi)

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