After seven rounds of U.S.- led proximity talks, efforts to promote direct negotiations between the Israelis and the Palestinians are 'nearing a turning point,' a top UN official said here on Tuesday. The statement came as Oscar Fernandez Taranco, UN assistant secretary-general for political affairs, briefed the UN Security Council on the situation in the Middle East and developments in the peace process. 'Success will require sustained regional and international support,' said Taranco, welcoming the July 29 decision by the Arab League (AL) foreign ministers to give its backing for Palestinian President Mahmud Abbas to enter into direct negotiations. 'For these negotiations to succeed, it is crucial to maintain an enabling climate on the ground,' he added. Taranco lauded the decision by Israeli authorities to ease obstacles to movement in West Bank on the occasion of the Muslim holy month of Ramadan and urged for access to be expanded. However, he cited concern over Israeli settlement activity and the increase in the demolition of Palestinian-owned structures in an area of the West Bank, which had displaced or affected 212 people. Israel has imposed a partial moratorium on settlement construction in the West Bank, which is due to expire on Sept. 26. Taranco called for the extension of the settlement halt beyond the end-date, including construction activity in East Jerusalem. 'Under the Roadmap, Israel is obligated to freeze all settlement activity, including natural growth, and dismantle outposts erected since March 2001,' said Taranco. The Roadmap for Peace outlines a plan for a two-state solution to the Israeli- Palestinian conflict supported by the Quartet -- an international coalition consisting of the UN, the European Union, the United States and Russia. The Quartet is seeking the two- state solution -- a secure Israel to live in peace with an independent Palestinian state. Meanwhile, Taranco drew the Council's attention to an Aug. 15 report issued by the Palestinian Authority that noted substantial progress was made in state- building efforts and promoting a stable society. 'The United Nations welcomes this achievement,' said Taranco. But he warned that the Palestinian Authority will face a serious liquidity crisis in September without additional external financing. 'Current initial estimates of donor commitments through 2010 suggest that the financing deficit will exceed 300 million U.S. dollars. To reinforce stability, which is critical in the context of renewed negotiations, donors must reaffirm their support,' Taranco said. SITUATION IN GAZA The UN official noted positive developments in Gaza, due to Israel's policy decision to ease its blockade on the territory in June. Taranco cited a continual increase in the volume and variety of supplies entering Gaza -- the weekly average of imported truckloads has reached 1,006. However, he added that 'while these are positive developments, imports into Gaza still remain far below the weekly average of truckloads before the closure was instituted in 2007. The current extent of easing cannot meet the crucial longer- term construction and rehabilitation needs of Gazans and resuscitate the legitimate economy.' Violence by Palestinian militant groups targeting Israelis also poses a threat to stability in the region, noted Taranco. 'In a serious incident, a grad-rocket was fired on July 30 from Gaza on the Israeli town of Ashkelton, causing no injuries. We continue to condemn rocket fire, which indiscriminately targets civilians,' he said. The UN official reiterated the call for the release of imprisoned Israeli soldier Gilad Shalit from Palestinian militants -- Aug. 4 marked his 1,500th day in captivity. Taranco urged both Israeli and Palestinian authorities to continue deliberations in order to move beyond proximity talks and into direct negotiations. 'We remain convinced that direct and meaningful negotiations are the only avenue towards a comprehensive, sustainable solution that fulfills the aspirations of the Israeli and the Palestinian peoples,' he said. 