Israel cautious on West Bank moves ahead of summit

JERUSALEM (Reuters) - Israel is reluctant to remove roadblocks and other West Bank restrictions to boost Palestinian President Mahmoud Abbas's new government until he does more to curb militants, officials said ahead of a summit on Monday.

The summit between Israeli Prime Minister Ehud Olmert and Abbas in Egypt follows an Israeli decision on Sunday to transfer hundreds of millions of dollars to Abbas's government, formed after a violent takeover of the Gaza Strip by Islamist Hamas.

After its accord on the funds, Israel is resisting U.S. pressure for it to uproot major roadblocks, checkpoints and outposts in the Israeli-occupied West Bank until Abbas reins in militants more effectively, the Israeli officials said.

Olmert was expected at the summit in the Red Sea resort of Sharm el-Sheikh to outline at least some of the measures he would be prepared to take to bolster Abbas's emergency government in the West Bank.

Monday's talks, which will include Egyptian President Hosni Mubarak and Jordan's King Abdullah, will be the first since Hamas routed Abbas's Fatah forces and seized control of the Gaza Strip more than a week ago.

"The important thing for President Abbas is to revive the peace process and the political negotiations in order to end the Israeli occupation and establish a Palestinian state," senior Abbas aide Saeb Erekat said in Sharm el-Sheikh.

Abbas responded to Gaza's takeover by sacking the unity government led by Prime Minister Ismail Haniyeh of Hamas and by quickly forming an emergency administration in the West Bank backed by the United States, the European Union and Arab allies.

Olmert said on Sunday he would present security demands to Abbas. Israel's goal is to isolate Hamas economically, diplomatically and militarily in the Gaza Strip, while allowing funds to flow to Abbas's new administration in the West Bank.

FUNDS

Olmert's cabinet on Sunday agreed to start unfreezing hundreds of millions of dollars in Palestinian tax revenues to help finance the emergency government.

"(Abbas's) government can be a partner if he will be serious about implementing (steps to curb militants), and I believe that the release of funds should be overseen by monitors to ensure that money is allocated to appropriate purposes," Housing Minister Meir Sheetrit said.

Olmert's spokeswoman Miri Eisin said the summit would focus broadly on the "framework" for talks with Abbas going forward. "That means talking on the political level about an independent (Palestinian) state as a clear-cut goal of the moderates."

Washington has asked Olmert to take concrete steps to help Abbas, such as easing restrictions on Palestinian access to the Jordan Valley, as well as removing major barriers, checkpoints and roadblocks near major Palestinian population centers, including Hebron, Bethlehem and Nablus.

But an Israeli official said: "We're not giving any of that upfront ... One suicide bombing and we're back to square one."

Another senior Israeli official said Olmert wanted to be sure that Abbas had no plans to reconcile with Hamas.

Israel plans to cut off all but humanitarian aid and basic services to step up pressure on Hamas in its Gaza stronghold.

International aid agency Oxfam said Gaza was on the brink of a humanitarian crisis and warned of a collapse of the region's economy and basic services such as health and water systems.

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