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By THE ASSOCIATED PRESS | JERUSALEM - The next Israeli government will have to commit to a settlement freeze before peace talks can resume, Palestinian officials said Tuesday, after TV exit polls that predicted that moderate Tzipi Livni edged out hard-liner Benjamin Netanyahu in Israel's election.

Netanyahu, leader of the right-wing Likud Party, has said he would expand West Bank settlements.

Livni, who heads the centrist Kadima Party, was Israel's chief negotiator in a year of inconclusive peace talks with the Palestinians. However, settlement construction continued and even accelerated under the outgoing Kadima-led government.

Exit polls released by three Israeli TV stations indicated that Kadima narrowly emerged as the largest party. However, with at most 30 seats in the 120-member parliament, Kadima would have to govern in a coalition and might not find enough willing partners.

Likud was trailing Kadima only by two seats, according to the exit polls, and Netanyahu could still be given the job of forming the coalition, if enough legislators support him.

"Kadima winning doesn't mean it will be able to form a government," said Rafiq Husseini, a senior aide to Palestinian President Mahmoud Abbas.

In any case, Abbas would only resume peace talks with Israel if the next government commits to a settlement freeze, Husseini said.

"We now have clear conditions for whoever heads the Israeli government," he said. "The conditions begin with the halt of settlement activities immediately ... for negotiations to start again."

Establishing a homeland
The Palestinians claim all of the West Bank as part of a future state and say the settlements, home to some 280,000 Jews, will make it impossible to establish an independent homeland.

In Gaza, Hamas spokesman Fawzi Barhoum said the election results don't make a difference in the lives of Palestinians. "Anyone who thinks that new faces might bring change is mistaken," he said, even before the exit polls were released.

"In the past 60 years, the Zionist entity witnessed many changes ... of leaders, all of them worked and are still working to eliminate the Palestinian existence, to build a Jewish state and to isolate Palestinians in an apartheid canton, like what we have here in Gaza."

Israel waged a three-week war against Gaza's Hamas rulers, unilaterally halting the offensive on Jan. 18. Currently, Israel is engaged in indirect talks with Hamas over the terms of a durable cease-fire, including a prisoner swap.

In such a swap, Israel would free hundreds of Palestinian prisoners, including those serving multiple life terms, for an Israeli soldier held by Hamas militants. In his four years in office, Abbas has been unable to win freedom for large numbers of long-serving prisoners.

Israel's election came at a time when Abbas' political legitimacy is being increasingly questioned at home. The establishment of a Palestinian state, through negotiations with Israel, has been the cornerstone of his policy. However, he's had nothing to show for a year of talks.

Increased tensions
The tough new conditions posed by his aides on Tuesday were a reflection of the growing frustration among Palestinian moderates.

Israel's election was met by widespread indifference by ordinary Palestinians.

Mohannad Assad, 30, a resident of the West Bank town of Ramallah, said Israel's choice of prime minister makes no difference to him.

However, Assad said he is concerned about the rise of Israel's rightist politician, Avigdor Lieberman, who has said Israeli Arab must prove their loyalty to the state in exchange for keeping their Israeli citizenship.

Lieberman's Yisrael Beitenu Party is emerging as Israel's third-largest party.

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