JERUSALEM, April 17 (JTA) — A shuttle mission by U.S. Middle East envoy Dennis Ross aimed at reviving Israeli-Palestinian negotiations was overshadowed this week by a political scandal in Israel that threatened to bring down Prime Minister Benjamin Netanyahu’s government. Ross held separate talks with Netanyahu and Palestinian Authority leader Yasser Arafat in a bid to come up with a way to resume peace negotiations, broken off last month by the Palestinians after Israel broke ground for a new Jewish neighborhood in southeastern Jerusalem. Ross called on each side to adopt confidence-building gestures to restore an atmosphere of trust between the sides. Israel has so far rejected American suggestions to freeze the building on Har Homa. But Israeli sources said this week that Jerusalem may announce a plan to build housing for Palestinians near the Har Homa site in Jerusalem. As for the Palestinians, Ross called on Arafat to renew security cooperation with Israel. Israel has demanded that the Palestinians halt violence and crack down on terror as a condition for advancing the negotiations. Despite the efforts to revive the peace talks, one Israeli official observed that it seemed unlikely that anything would be decided in the midst of the current political storm in Israel. The upheaval erupted Wednesday with the disclosure that police investigators had recommended indicting Netanyahu on charges of fraud and breach of public trust. The recommendation was centered on whether Netanyahu was aware of alleged external political and internal interests when he decided to appoint Jerusalem lawyer Roni Bar-On as attorney general. Bar-On, who was named at a January Cabinet meeting, stepped down less than two days later, amid a controversy over his professional qualifications for the job. According to the allegations, Shas Knesset member Aryeh Deri had pressed for Bar-On’s appointment, hoping to get a plea bargain in his own corruption trial, and conditioned his party’s support of the Hebron agreement on the appointment. Police, who this week presented the state attorney with the report on their three-month investigation, had recommended indictments against three other principles named in connection to the affair: Justice Minister Tzachi Hanegbi, Deri, and Avigdor Lieberman, the director-general of the prime minister’s office. In his first remarks since the recommendation involving the Bar-On Affair was made public, Netanyahu told Likud supporters at party headquarters in Tel Aviv that he had no intention of stepping down. “The truth will win,” Netanyahu said. “We were elected to take a different path, and we are taking a different path. “I came here to say that we will continue to do these things, to lead Israel until the year 2,000, and beyond.” But the resolve expressed by Netanyahu seemed less apparent in his coalition, which appeared to be showing signs of strain. Members of the Third Way Party convened to discuss the ramifications of the police recommendations. One member, Yehuda Harel, struck a cautious note, saying that the party had to wait for a decision from State Prosecutor Edna Arbel and Attorney General Elyakim Rubinstein whether to proceed with an indictment against Netanyahu. But Knesset member Alex Lubotsky said his Third Way Party could not stand by even if they decided not to press charges. “If there is any indication of some kind of political deal, which damages the rule of law, even in a report, I don’t see how we can stay in the government,” Lubotsky said. Members of the Likud Party accused the police of leaking the recommendation to bring down the government and called for patience until Arbel and Rubinstein issued their decision. But some Likud members were less supportive of the prime minister. At the Likud gathering where Netanyahu spoke, three party members – - Communications Minister Limor Livnat, former Science Minister Ze’ev “Benny” Begin and Tel Aviv Mayor Ronni Milo — conspicuously left the room before the prime minister’s address. Livnat was heckled by some when she did not voice support for the prime minister during her speech. Opposition leaders, meanwhile, demanded Netanyahu’s immediate resignation and called for new elections, regardless of whether an indictment is ultimately served. The Meretz and Labor parties called for an emergency Knesset session during its Passover recess to discuss the matter. Arbel and Rubinstein continued their consultations Thursday in an effort to draw up their decision before Passover. The two met at a conference center outside of Jerusalem in an effort to avoid the political limelight.