MIDDLE EAST:Israel's prime minister Ehud Olmert and Palestinian president Mahmoud Abbas failed to reach agreement yesterday over the deadlock on a joint statement of principles ahead of a US-sponsored summit that will most likely take place next week.
However, Israeli officials said that progress had been made in the meeting and negotiating teams were set to meet again late last night.
The main sticking point remains the Palestinian demand that the sides move directly to talks over the issues that are at the heart of the conflict - borders, Jerusalem and refugees - and Israel's insistence that this be contingent on the implementation of the first phase of the road map peace plan. This requires that the Palestinians disarm.
One creative solution being discussed last night entailed Israel agreeing to debate the core issues but on condition that any agreements reached between the sides only be implemented once the first phase of the road map had been fulfilled. Israel, for its part, is required to cease all settlement construction and evacuate the dozens of illegal settlements across the West Bank, as part of its first-phase obligations.
Mr Olmert told his cabinet that the government would not build any new settlements and would begin dismantling the outposts. "Let's be straight, we committed ourselves in the road map not to build new settlements and we will not build any," he was quoted as telling his cabinet.
But this statement falls short of a US demand that Israel freeze all construction, including in existing settlements. Mr Olmert was also quoted as saying that he would not "choke off under any circumstances the existing settlements". The cabinet approved the release of 441 Palestinian prisoners ahead of the summit, which will be held in Annapolis, Maryland. But Palestinian leaders were unmoved, saying it fell far short of the 2,000 prisoners they had requested be freed and was largely a PR manoeuvre.
The US is expected to issue invitations to the summit regardless of whether the sides have reached agreement on a joint statement of principles.
But Israel and the Palestinians have widely differing expectations of the summit. While Mr Olmert sees it as a preparatory meeting that will restart peace talks, Mr Abbas wants the joint statement to set out in detail the issues post-summit talks will deal with - how they will be conducted and a deadline by when they must be concluded.
Few Israelis believe that the summit will spark any real progress and Israeli military officials have warned of another eruption of violence if it does not. One parliamentarian joked that the sides should stay at home so as to prevent the damage to the environment that will be caused by the airplane fuel they burn up on the way to Maryland.
Meanwhile, Middle East envoy Tony Blair announced a series of projects aimed at boosting the Palestinian economy. Mr Blair, who now works on behalf of the US, Russia, the EU and UN, unveiled plans for the Jericho Agro-Industrial Park - meant to assist Palestinians in exporting goods to the EU. A second project entails the construction of a Turkish-backed industrial zone in the West Bank town of Hebron.
Mr Blair said that "without hope of prosperity and a rise in living standards [ for Palestinians] . . . then politics will never succeed".