Blair holds out hope for Israel, Palestinian talks

WASHINGTON, Nov 4 (Reuters) West Asia envoy and former British Prime Minister Tony Blair today held out hope that talks in the United States this month to broker a ''two-state'' agreement between Israel and Palestine could bear fruit.

''I believe it will happen and I think it can and should be successful,'' Blair told CNN television in a videolink from Jerusalem. He disclosed no details or timeframe for the event.

Blair and US Secretary of State Condoleezza Rice are trying to bridge gaps between the two sides before a US-hosted conference expected in the last week of November in Annapolis, Maryland, although no date has been announced.

Blair said any deal would offer solid security assurances to Israel, a viable Palestinian state and ''put this long-running dispute to rest.'' Blair said the Annapolis event could be followed by another conference in December ''where the Palestinians will set out their plans for the future, how they will reform the Palestinian institutions'' of statehood.

Israel and the Palestinians are still at odds over a joint document for the conference, which would serve as a launching pad for negotiations on core issues such as borders and the fate of Jerusalem and millions of Palestinian refugees.

Asked what role the Islamist group Hamas could play in the deal, Blair said that ''if they want our help then the terms upon which we can help are terms that accept the existence of Israel as well as the existence of the Palestinian state.'' Blair said that Arab states like Saudi Arabia would play a role in the talks, although he did not say whether Saudi officials would attend the Annapolis meeting.

''I don't think there's a problem actually with the Arab states coming behind this process, provided of course that it is substantial,'' Blair said.

Reuters NY DB2344