Israel to pursue West Bank talks until year-end

JERUSALEM, May 24 (Reuters) Israel will try diplomacy with the Palestinians until the end of the year before resorting to a plan to set a border unilaterally in the occupied West Bank, a senior cabinet minister said today.

A spokesman for Palestinian President Mahmoud Abbas accused the Israeli army of trying to undercut negotiations by launching a rare daytime raid in the West Bank city of Ramallah in which three Palestinians were killed and more than 40 wounded.

U S President George W Bush gave a surprise boost to Israeli Prime Minister Ehud Olmert's plan to redraw the Jewish settlement map during meetings in Washington, but emphasised that Israel should first pursue peace talks.

Few expect negotiations with Abbas to make much progress and Israel has said formal statehood talks depend on whether the Hamas-led government renounces violence, recognises Israel and abides by interim peace deals.

''We will devote this year sincerely, with a real and strong desire, to see if we can conduct negotiations with the hairman of the Palestinian Authority, Abu Mazen,'' Justice Minister Haim Ramon told Israel Radio, using a nickname for Abbas.

''If it turns out we don't have a partner, we will move to the realignment plan.'' Israeli political analyst Joseph Alpher said Olmert and his aides were ''going through the motions'' having dismissed Abbas as ''irrelevant''.

In central Ramallah, Israeli troops on an arrest raid clashed with Palestinian gunmen and stone-throwers.

Mohammed al-Shoubaki, a senior financier for Palestinian militant group Islamic Jihad, was taken into custody by the troops before they withdrew, his family said.

''The Israeli army's raid in Ramallah shows the Israeli government and army are doing their best to increase tensions and destroy the truce and prevent a return to the negotiating table,'' said Abbas adviser Nabil Abu Rdainah.

NO NEED TO WAIT Olmert's West Bank plan calls for removing isolated settlements, expanding larger settlement blocs and drawing a unilateral border in the absence of peace talks.

Palestinians call it a land grab that would deprive them of a viable state.

''I do not think Mr Olmert needs to wait. We can immediately engage in negotiations without further delay. Unilateralism should not be an option. It only adds to the complexities and prolongs conflict,'' said Saeb Erekat, a top aide to Abbas.

Olmert won a March election touting the so-called ''realignment'' plan.

At a joint news conference yesterday, Bush praised Olmert's ''bold ideas'', surprising some in Israel who had feared the United States would take a more cautious approach due to pressures from Arab allies.

Washington stands by its long-stalled ''road map'' for negotiations leading to a Palestinian state alongside Israil.

Olmert said he and Bush had agreed in principle to continue not providing funds for Palestinian salaries.

Pressure from Israel, the United States and the European Union has held up vital funding for the Hamas-led Palestinian Authority, preventing it from paying 165,000 government workers since March.

The economic crisis and ensuing power struggle between Hamas and Abbas's once dominant Fatah faction have raised fears of civil war, particularly in the Gaza Strip, where clashes have erupted between rival factions.

Gunmen killed one Hamas member and injured four in fresh shootings in Gaza.

Thousands of gunmen, some from Fatah splinter groups, later poured onto the streets of Gaza in support of the Hamas-led government and a new Hamas-led police force.

Prime Minister Ismail Haniyeh of Hamas planned to meet with leaders of both rival groups to try to restore calm under the auspices of Egyptian security mediators.

REUTERS SHR BST2006