Obama unveils 400 million dollar Palestinian aid package

AFP - President Barack Obama said Wednesday he believed "significant progress" was possible in the Middle East peace process this year, adding the US was to unveil a huge aid package for the Palestinians.

Now is the time to move forward from the current "dead end," Obama said as he welcomed Palestinian leader Mahmud Abbas to the White House for talks.

He vowed the "full weight" of US involvement in the stalemated peace process, predicting "significant progress" by the end of the year.

Abbas arrived for the Oval Office talks with already volatile Middle East politics roiled by the aftermath of the deadly May 31 Israeli commando raid on a flotilla of boats seeking to beat the Israeli blockade on the Gaza Strip.

He is calling on Obama to make "bold" decisions to jump-start peace moves in the Middle East, but prospects for progress in US-brokered Israeli-Palestinian indirect "proximity" talks are threatened by regional fury over the raid.

Calling the situation in the impoverished Gaza Strip "unsustainable," Obama urged Israel to meet the demands of the UN Security Council in the probe into the deadly incidence in which nine activists were killed by Israeli commandos.

Obama also said the United States was to unveil a 400-million-dollar civilian aid package for the Palestinians, with the money to be used for projects such as housing and schools.

Abbas said there was a need to lift the "siege" of the Palestinian people.

The two leaders were to discuss alleviating the plight of Gaza, which is run by Hamas militants, and the prospects for direct Israeli-Palestinian talks.

The United States has joined other foreign governments and the United Nations in calling for an inquiry into the flotilla raid with an international component, saying it is key to any investigation's credibility.

But Israel has rejected any international inquiry into the affair, amid calls for an easing of the three-year blockade of Gaza.

Earlier, Israeli Prime Minister Benjamin Netanyahu said he was in talks with "several members of the international community" but said a probe should not focus on the role of Israeli soldiers in the raid.

At the White House, Obama and Abbas will "discuss steps to improve life for the people of Gaza, including US support for specific projects to promote economic development and greater quality of life," a US official said.

Obama also wants to discuss a "long-term strategy for progress that we will advance through consultations" with the Palestinians, Israelis, Egyptians and other partners, the official added on condition of anonymity.

Despite the fallout from the Gaza raid, the pair will consider how to forge progress in proximity talks between Israel and the Palestinians mediated by US envoy George Mitchell.

"We look forward to engaging with president Abbas to move the process forward so that we can get to direct talks to address all the final status issues," the official said.

Obama will also renew his call on Israelis and Palestinians to "ensure that neither side take provocative steps that could stand in the way of progress," according to the official.

Abbas met Obama a week after Netanyahu canceled his own White House trip to deal with the fallout from the Gaza crisis.

An Israeli official said earlier Netanyahu was working to reschedule the visit, which could take place before the end of June.

Abbas has set a rhetorical framework for his long-awaited summit with the US president.

"My message to Obama during our meeting in Washington next week will be that we need bold decisions to change the face of the region," he told an investment conference in the West Bank last week.

The Palestinian leader is also scheduled to meet with US lawmakers and National Security Adviser James Jones.