Abbas-Olmert meet at Mideast summit

SHARM EL-SHEIKH, Egypt (AFP) - Palestinian president Mahmud Abbas and Israeli Prime Minister Ehud Olmert met in Egypt on Monday for the first time since the seizure of Gaza by Hamas fighters 10 days.

The talks in the Red Sea resort of Sharm el-Sheikh come ahead of a summit of Middle East leaders aimed at boosting Abbas and his Western-backed cabinet but with little hope of a breakthrough on reviving stalled peace talks.

The two men shook hands at their first meeting since the Islamists took control of Gaza on June 15 after days of ferocious gunbattles that left more than 110 people dead and led to Abbas sacking the three-month-old Hamas-led unity government.

Abbas and Olmert last met on April 15 and a planned encounter in early June was cancelled.

"The message is clear, let's let the moderates define the agenda, let's let those who believe in dialogue, who believe that through dialogue you can achieve a resolution, should be the ones to define what's going to happen," Olmert's spokeswoman Miri Eisin told reporters.

"The idea is to try and talk and to go forward," she said. "Let's stop the extremists from defining hte agenda."

Since the seizure of Gaza, Abbas sacked the unity government and created an emergency cabinet that enjoys the support of the West, but it has effectively split the Palestinians into two separate entities.

Egypt had harsh words for Israel and described the international roadmap for peace as dead, calling for final status talks on Palestinian statehood, something Israel has repeatedly rejected until security issues are resolved.

"The Israeli incursions, and the action it is undertaking as an occupying force, the suffering of the Palestinian people, the events in Gaza, all show that the absence of peace is what has led Palestinians to turn their weapons on each other instead of committing to resisting the occupation," presidential spokesman Suleiman Awad told reporters.

"President (Hosni) Mubarak calls for an agreement between the Israelis and the Palestinians to start negotiations including over the final status," Awad said.

"Let us wait to see what happens," was all Abbas would tell reporters on his arrival in Sharm for the summit, to be attended also by Mubarak and Jordan's King Abdullah II.

In a gesture to the Palestinian authority and its new Western-backed cabinet, the Israeli cabinet on Sunday agreed in principle to release hundreds of millions of dollars in tax receipts owed to the Palestinians.

But it played down hopes of a breakthrough on peace talks.

"Let's wait and see the stabilisation of the new Palestinian government. Let's take it one step at a time," Eisin said of Abbas's emergency cabinet, which was sworn in only last weekend.

The withholding of tax receipts over the past 15 months while Hamas-led governments were in power -- now totalling well over 600 million dollars -- sparked a financial crisis for the Palestinian Authority leaving it largely unable to pay its own staff or contractors.

Abbas and the other Arab participants at the summit have been pressing for Israel to be generous in its support for the Palestinian leadership, as well as calling for a date for a resumption of peace talks.

On Sunday, Egyptian Foreign Minister Ahmed Abul Gheit called on Israel to allow aid to flow to the Gaza Strip, saying it was "not permissible to punish the Palestinian people."

In a telephone conversation with Israeli Foreign Minister Tzipi Livni, he called for Israel to halt settlements and end the construction of the separation wall.

Abbas's spokesman Nabil Abu Rudeina said the Palestinian leader would insist on the "complete lifting of the siege and serious action to advance the peace process to create a Palestinian state."

But Olmert told his ministers he would also expect undertakings from Abbas.

"I will present demands at the summit concerning security and the war against terrorism while at the same time stressing that we are ready to cooperate with the new government."

Egypt and Jordan, the only two countries to have signed a peace deal with Israel, believe stability in the Palestinian territories will only come when peace is at hand.

"We are telling Israel: you have seen the results of your inaction. Despair will lead to more extremism and violence," an Egyptian diplomatic source told AFP.

Egypt, which is battling to contain a powerful Islamist movement at home, and fears a spillover of unrest, has every incentive to maintain stability in Gaza.

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