JERUSALEM, May 8 (JTA) — U.S. Middle East envoy Dennis Ross is encountering hardened positions on both sides as he attempts to revive Israeli-Palestinians negotiations. Ross met for three hours Thursday in Gaza with Palestinian Authority Chairman Yasser Arafat before going to Jerusalem to meet with Prime Minister Benjamin Netanyahu. He was scheduled to meet with Arafat again Friday in the West Bank town of Ramallah before traveling on to Egypt for talks with President Hosni Mubarak. “There are difficult problems that have to be overcome, but we all realize the importance of trying to find ways to move forward,” Ross told reporters in Gaza after the first meeting with Arafat. Israeli-Palestinian contacts all but stopped in mid-March, when Israel started construction of a new Jewish neighborhood at Har Homa in southeastern Jerusalem. The Palestinians have been calling for a halt to the project, and to settlement expansion, as a precondition for restarting negotiations. Israel also has a precondition — the resumption of intelligence-sharing, which the Palestinians suspended nearly two months ago to protest the Har Homa construction. During Ross’ previous visit to the region less than a month ago, he succeeded in arranging a meeting among top security officials from both sides and CIA representatives. However, except for limited instances, Israeli-Palestinian security coordination has not resumed. In a separate development, Jewish settlers began renovation work Thursday at a house recently purchased from a church on Jerusalem’s Mount of Olives. The settlers plan to establish a Jewish seminary at the site. Palestinian Authority officials denounced the move, saying it was politically motivated. The Archbishop of the Armenian church sold the house to a foreign company that was operating on behalf of Jewish millionaire Irwin Moscowitz, according to Palestinian sources. Moscowitz, who has purchased land around Har Homa, was a key figure in the opening of a second entrance to an archaeological tunnel in Jerusalem’s Old City last September, a move that led to three days of violent and fatal clashes. Palestinian officials, seeking to block Israeli expansion in areas they claim as their own, earlier this week announced that any Palestinian who sold land to Jews would face the death penalty.