The situation is compounded by ``the policy of settlement, expansion and annexation aimed at judaising Jerusalem,'' the Palestinian Authority and the executive committee of the PLO said after a meeting chaired by Yasser Arafat. ``The Palestinian leadership remains ready to hold meetings with the Israelis, to resume negotiations rapidly and to respect the commitments it has made. ``But the problem lies in the absence of a clearly set out Israeli position towards the US initiative and the peace process as a whole,'' thestatement said.