New meeting between Olmert and Abbas

The two leaders are meeting again to discuss peace negotiations, but pre-discussions about continued Israeli settlements and Jerusalem's future may complicate progress in the talks.


RAMALLAH, West Bank, Feb 18 (Reuters) - Israeli and
Palestinian leaders will meet for another session of peace
negotiations in Jerusalem on Tuesday but conflicting statements
by both parties have clouded the state of progress in the talks.

Disputing comments by Israeli Prime Minister Ehud Olmert,
the Palestinians say they have not agreed to put off talks on
the future of Jerusalem until the end of the process, a senior
adviser to Palestinian President Mahmoud Abbas said on Monday.

Officials in the West Bank also responded sharply to the
latest assurance by an Israeli minister, aimed at right-wingers
in Olmert's coalition, that the government had plans to press on
with building Jewish settlements on Arab land around the city.

Olmert said on Sunday Abbas had consented to hold off
discussing any possible division of Jerusalem until the end of
the negotiating process, a move that could help the Israeli
leader hold together his fragile coalition government for now.

"We will postpone dealing with Jerusalem to the last phase
of the negotiations," he said, stressing that Abbas had
"accepted" his suggestion.

Palestinian spokesmen have repeatedly said postponing talks
on Jerusalem would be unacceptable.

"The issue of Jerusalem is a fundamental issue and cannot be
postponed. The president did not agree to postpone it," said
Nimer Hammad, Abbas's senior political adviser.

Later in the day, Israeli Housing Minister Zeev Boim told
parliament there were initial plans to build up to 1,000 new
housing units in a Jewish settlement which Israel calls Har
Homa, between Jerusalem and the West Bank town of Bethlehem.

 It appeared to be the latest effort to mollify a right-wing
coalition party that has been threatening to bolt Olmert's
government if he even discusses changing Jerusalem's current
status. A spokesman for Boim said no construction was imminent.

Israel considers Arab East Jerusalem, which it captured in
1967 and later annexed along with adjacent areas of the West
Bank in a move that was never recognised internationally, as
part of its "indivisible and eternal capital".

Palestinians want East Jerusalem to be capital of the state
they hope to establish in the occupied West Bank and Gaza Strip.

A 2003 U.S.-backed road map plan for peace laid out by
President George W. Bush called on Israel to halt all settlement
activity on occupied land and for Palestinians to rein in
militants. Both sides reaffirmed those commitments when Bush
visited the region last month as part of his efforts to push for
a deal before he leaves office early next year.


Israeli Foreign Minister Tzipi Livni, who leads Israel's
negotiating team told parliament that she was not "giving
presents" to the Palestinians during talks: "I am not Santa
Claus or some uncle that is giving out perks," she said.

Livni, who met her Palestinian counterpart Ahmed Qurei on
Monday, added that some Israelis act "as though the negotiations
are a kind of gift to the Palestinians or a present to the
Americans". She added: "I don't accept that."

She said Israel would continue talking to West Bank
Palestinians despite militant rocket fire into Israel from the
Hamas-controlled Gaza Strip, saying it would only help the
Islamists, who seized the enclave from Abbas's Fatah in June.

Abbas and Olmert promised Bush they would meet frequently to
help advance Palestinian statehood negotiations that resumed
after a U.S.-hosted Middle East peace conference in November.

The two sides have agreed to address core issues such as
borders and the future of Jerusalem and Palestinian refugees.

In his speech on Sunday, Olmert said the goal of peace talks
with Abbas was to reach an understanding on "basic principles"
for a Palestinian state by the end of 2008, rather than the
full-fledged agreement that Palestinians have been seeking.

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