Washington (CNN) -- The United States may have to expand its role from Middle East peace talks facilitator to become a broker on specific core issues, Palestinian Prime Minister Salam Fayyad said Sunday.
Appearing on the ABC program "This Week," Fayyad indicated that progress toward a peace settlement could occur in the short-term despite Israel's refusal to halt construction of new settlements in the West Bank and East Jerusalem.
However, Israel must provide specifics about its position on core issues such as what a Palestinian state would entail, the status of Jerusalem and the return of refugees, Fayyad said, adding that the lack of a new settlement freeze erodes trust in the process.
Asked if the United States would need to offer so-called "bridging" proposals on specific issues to try to stimulate negotiations, Fayyad said that "may be necessary."
"It may be unavoidable, actually, for the United States, acting as a broker at some point, to come in with bridging proposals so we make this happen," he said.
The interview, which included Israeli opposition leader and former Foreign Minister Tzipi Livni, took place two days after U.S. Secretary of State Hillary Clinton outlined a direction for the peace process after giving up on trying to persuade Israel to again freeze settlement construction as a condition for the direct talks to resume.
"It is no secret that the parties have a long way to go and that they have not yet made the difficult decisions that peace requires," Clinton told the Brookings Institution's Saban Forum.
As the administration sought a new strategy to save the peace talks, Clinton delivered a tough message that reflected the administration's impatience with both sides.
She warned that the demographic trends resulting from continued Israeli occupation of the Palestinian territories are risking Israel's future as a Jewish state, while extremism in the absence of peace is further jeopardizing its security.
"We conclude without a shadow of a doubt that ending this conflict once and for all and achieving a comprehensive regional peace is imperative for safeguarding Israel's future," Clinton said, adding that the conditions Palestinians suffer due to the occupation are "unacceptable" and "unsustainable."
On the ABC program, Livni also said that a peace settlement with the Palestinians is in Israel's interest, adding that she disagreed with Israel's refusal to a temporary settlement freeze requested by the United States.
"I believe that peace treaty between Israel and the Palestinians is an Israeli interest; it's not a favor to President (Barack) Obama," Livni said. "And Israel needs to make these kind of decisions in order to live in peace, so, basically, a peace treaty between Israel and the Palestinians is an American interest, but it is also an Israeli interest."
Fayyad complained that the lack of a settlement freeze damaged the credibility of the entire process, and he called for Israel to make clear its position on the core issues of the talks.
"I think what really has to be done now is, in order to give the process the kind of credibility that's required, is for us to really know with precision where it is that the government in Israel stands on the fundamental issue of what it is that's meant by an end to Israeli occupation, what is it that's meant by a state of Palestine," Fayyad said.
Clinton said the Obama administration would work with the parties to pursue a framework agreement on the core issues of the conflict: borders and security, settlements, water and refugees, and on Jerusalem, which would pave the way for the resumption of direct talks and a final peace deal.
Starting with borders, Clinton said the parties must "agree to a single line drawn on a map which divides Israel from Palestine" in a way that offers Palestinians an end to the occupation but protects Israel's security.
While acknowledging the fate of Palestinian refugees was a "difficult and emotional issue," Clinton said, "there must be a just and permanent solution that meets the needs of both sides."
Although the United States abandoned efforts to secure a settlement freeze during the negotiation, Clinton said the issue of settlements must be dealt with in a final peace deal.
"We do not accept the legitimacy of continued settlement activity. We believe their continued expansion is corrosive not only to peace efforts and the two-state solution, but to Israel's future itself," she said.
"There surely will be no peace" without agreement on Jerusalem, the thorniest of all the final status issues because of its religious significance to Muslims, Christians and Jews, she said.
"The parties should mutually agree on an outcome that realizes the aspirations of both parties for Jerusalem and safeguards its status for people around the world," Clinton said.
She praised state-building efforts by the Palestinians and improvements in security, but acknowledged, "for all the progress on the ground and all that the Palestinian Authority has accomplished, a stubborn truth remains: While economic and institutional progress is important, indeed necessary, it is not a substitute for a political resolution."
Before her remarks, Clinton held talks with senior officials from both sides, including Fayyad and Israeli Defense Minister Ehud Barak. She also met with lead Israeli and Palestinian negotiators and the U.N. special envoy for the region. The Obama administration's special Mideast peace envoy will travel to the region this week.
But Clinton put the onus squarely on the leaders themselves to understand each other's perspective, prepare their own publics for the difficult compromises that will need to be made and stop demonizing the other side.
"To demonstrate their commitment to peace, Israeli and Palestinian leaders should stop trying to assign blame for the next failure and focus instead on what they need to do to make these efforts succeed," she said.
Similarly, she warned against "unilateral actions" to prejudge the outcome, such as Israeli announcements about building in East Jerusalem and Palestinian threats to seek independence at the United Nations.
CNN's Jill Dougherty, Elise Labott and Tom Cohen contributed to this report.