Olmert spurns bid to stop Jerusalem dig - paper

JERUSALEM, Feb 8 (Reuters) Israeli Prime Minister Ehud Olmert has spurned an appeal from his defence minister to halt excavation work near Jerusalem's most important holy site, the Haaretz daily said today.

Tensions have flared between Israel and the Palestinians over the start of an Israeli excavation near a compound housing al-Aqsa mosque in Jerusalem, Islam's third holiest site.

Arab states have asked Israel to halt the work, which began on Tuesday, saying it could damage the mosque's foundations.

Palestinians said a ceasefire in Gaza with the Jewish state might unravel if the work continued.

''A thorough examination of the matter would reveal that nothing about the work underway will harm anyone, and there is no truth in the contentions against the work,'' the newspaper quoted Olmert's office as saying in rejecting a written appeal from Defence Minister Amir Peretz.

The Defence Ministry did not immediately comment on the report and Olmert's office was not available for a response.

Haaretz said Peretz wrote to Olmert yesterday calling for the immediate stop to the work for fear of an escalation and a deterioration in the security situation.

Palestinian President Mahmoud Abbas's Fatah faction said if any damage was caused to the mosque it ''will lead to a termination'' of a November ceasefire deal that has largely calmed Israeli-Palestinian violence in the Gaza border area, and spark a ''volcano of anger''.

Israel said the excavations in search of ancient artefacts beneath the compound known to Muslims as Haram al-Sharif and to Jews as the Temple Mount, would not harm the sacred site in Jerusalem's walled Old City.

Israel plans at a later stage to build a pedestrian bridge at the site to replace a ramp that was weakened in 2004, which leads up to the complex.

''I turn to Olmert to think anew,'' Sheikh Abdallah Nimr Darwish, head of Israel's Islamic Movement, told Israel Radio.

Referring to Olmert's planned February 19 peace talks with Abbas and US Secretary of State Condoleezza Rice, Darwish said: Whoever wants to speak about peace does not excavate anywhere in the area around the holy al-Aqsa mosque.'' REUTERS MS VV1243