(Repeats story from Tuesday without changes)
* Palestinians ready to shift focus to United Nations
* Israelis primed to match any unilateral actions
* Talk failure unlikely to ignite street violence
By Crispian Balmer
JERUSALEM, April 8 (Reuters) - If Middle East peace talks collapse this month, lawfare rather than warfare looks likely to fill the void, with the Palestinians set to confront Israel on the diplomatic stage rather than in any popular uprising.
The Israelis will seek to retaliate in such a way as to avoid an international fire storm, analysts and diplomats say, still leaving open the vague possibility of a negotiated end to their seemingly perennial conflict at a later stage in history.
After eight months of largely fruitless discussion aimed at achieving peace, the Israelis and Palestinians are at stalemate, prompting an increasingly glum U.S. Secretary of State John Kerry to call for a "reality check".
The two sides have until the end of April to step back from the brink, with their row focused on how to proceed and not on the core issues which have stymied previous peace efforts, such as the status of Jerusalem or the fate of Palestinian refugees.
But if the deadlock becomes a full blown failure, Palestinian leaders have already made clear they will seek to further their bid for nationhood via unilateral moves to join various international bodies and United Nations agencies.
President Mahmoud Abbas signed 15 conventions last week, with around 50 others being primed, including a possible application to join the International Criminal Court.
"Us going to the United Nations is a paradigm shift from our side, (a sign) that the bilateral talks might not be the only answer for ending occupation," said Mohammed Shtayyeh, a senior member of Abbas's Fatah movement.
On Monday, Shtayyeh said moves to join U.N. bodies would be carried out in "phases", suggesting the Palestinians would look to increase pressure on Israel and Washington in stages rather than in a single blitz.
Kerry said last month that if Abbas applied to join U.N. agencies, "he's automatically in them tomorrow". He added that if the Palestinians went down this path, they could "make life miserable for Israel".
The biggest threat for Israel comes in the shape of the ICC, with the Palestinians confident they could prosecute Israel there for alleged war crimes tied to the occupation of lands seized in 1967, including East Jerusalem and the West Bank.
However, the legal fight might not be a one-way street.
Israel's Economy Minister Naftali Bennett, head of the nationalist Jewish Home party, has threatened counter suits tied to rocket fire out of Gaza - a Palestinian territory which is ruled by the Islamist group Hamas, but which receives financing from the Abbas administration in the West Bank.
"If (Abbas) intends to sue Israel, he needs to know that a personal suit on war crimes that are committed daily by him and his treasury awaits him," Bennett told Army Radio on Sunday.
Another minister, who declined to be named because of the sensitive timing, said that if the talks failed, the government should annex some West Bank settlements, which are home to 350,000 Israelis and are deemed illegal by most countries.
Rapid settlement building on land Palestinians want for a future state has dogged successive talks and any unilateral Israeli annexation would send shockwaves around the world.
The minister said such a move would only concern settlement blocs near the 1967 lines, adding that the land grab would be needed to prevent a single, Jewish-Arab state slowly emerging from the rubble of decades of conflict and failed talks.
"The most important thing for me is I do not want to live in a bi-national country ... Since there is no way to absorb four million Palestinians, we need to separate from them."
Israeli Prime Minister Benjamin Netanyahu has said his government is readying retaliatory moves should the Palestinians walk away from the talks, but has not given precise details.
"He has a wide range of options. Administrative, economic, you name it. None of these measures might be very dramatic by themselves, but the combination could be painful," said Ehud Yaari, an Israel-based fellow at the Washington Institute for Near East Policy.
"I think he will try to resist annexations, but if the Palestinians declare open season on Israel in all forums, and go to the ICC, then he will face increasing Israeli pressure to do so," he told Reuters.
While opinion polls show more than 60 percent of Israelis support the "two state solution", some senior figures openly back the creation of a bi-national state, or a confederation.
"Sooner or later we will have a single state," said Moshe Arens, a former foreign and defence minister, who also served as Israeli ambassador to Washington. "This really depends on the majority of Palestinians wanting to be a part of Israel."
An opinion poll last December by the Palestinian Center for Policy and Survey said 56 percent of Palestinians no longer believed a Palestinian state could be created, with 32 percent supporting a single state where Arabs and Jews had equality.
The last time a concerted peace push fell apart, in 2000, violence soon spiraled out of control, coalescing into the second Palestinian Intifada. The uprising lasted more than four years, killing more than 4,000 Palestinians and 1,000 Israelis and wrecking the economy in Palestinian self-ruled areas.
Kerry warned last year that failure this time around could lead to another outbreak of bloodletting.
However Ghassan Khatib, an academic at Birzeit university in the West Bank and a former government minister, said polls for his Jerusalem Media and Communications Centre showed support for armed struggle stood at under 30 percent - its lowest level since polling on the issue started 17 years ago.
By contrast, in 2001, some 85 percent of Palestinians supported military operations against Israel.
As with the Israeli public, most Palestinians had little hope invested in the Kerry talks, meaning there will be no sense of wrecked expectations in the event of rupture.
"The current leadership is not at all interested in resuming violence. What happened last time around was a big lesson for everyone," said Khatib.
Some Jerusalem diplomats have questioned whether an ageing Abbas might simply decide to shut down his cash-strapped Palestinian Authority in case of failure, forcing the Israelis to take over the costly running of Palestinian towns and cities.
Such a dramatic decision could not be made alone by Abbas. He would need the endorsement of an army of officials whose livelihood depends on the Western-backed PA, meaning they all have a strong, vested interest in seeing it limp on.
"We had three years without negotiations before this last attempt and I think we will simply go back to a similar situation. Life will continue more or less as it was," said Khatib, a veteran observer of Palestinian affairs. (Writing by Crispian Balmer; Editing by Giles Elgood)
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