Abbas, Olmert to meet next week

GAZA, May 29 (Reuters) Palestinian President Mahmoud Abbas today said he would meet Israeli Prime Minister Ehud Olmert next week, keeping alive a US-backed dialogue despite Hamas rocket attacks on Israel and Israeli air raids in Gaza.

At a news conference with the president of the European parliament today, Abbas proposed a new truce between militants and Israel, and said he would see Olmert on June 7.

''We have no intention of reaching any kind of settlement, neither with Hamas nor with Islamic Jihad. We will hit them and continue to hit them,'' Olmert said in remarks at Israel's parliament, referring to two of the main militant groups behind rocket attacks on Israel.

Olmert's office said a meeting with Abbas was planned for next week but no specific date or location had been set. Israeli and Palestinian officials had previously said they expected the next meeting to take place in the West Bank city of Jericho.

Abbas, head of the Fatah faction that formed a unity government with Hamas two months ago, last met the Israeli leader on April 15 as part of US-brokered talks that were supposed to take place every two weeks.

The dialogue, which has focused on aspects of a future Palestinian state, has been delayed by Palestinian internal violence, Israeli-Palestinian fighting and Olmert's uncertain political future following an inquiry critical of his handling of last year's costly Lebanon war.

''They will be discussing a political horizon, meaning the composition of a future Palestinian state. They will not be discussing final status issues,'' said Israeli government spokesman David Baker.

Hamas and other militant groups have fired more than 270 rockets from Gaza, killing two Israelis, over the past two weeks.

Israel has hit back mainly with air strikes, in which more than 40 Palestinians, most of them fighters, have been killed.

In its first air strike of the day today, Israel destroyed several buildings at a Hamas training base in the Gaza Strip and no casualties were reported, Hamas officials said.

Two armed militants were also killed in separate raids by Israeli undercover troops in the occupied West Bank, Palestinian hospital staff and the Israeli army said.

Three Islamic Jihad militants were killed in an explosion in central Gaza. A Palestinian security source said it appeared to be a ''work accident'', caused when explosives detonated accidentally, rather than an Israeli attack.

CEASEFIRE CALL Abbas has been trying to broker a ceasefire between the militants and Israel.

At the news conference with European Parliament President Hans-Gert Pottering, Abbas proposed a truce that would initially cover Gaza and be extended within a month to the Israeli-occupied West Bank.

Hamas has said any ceasefire must include an end to Israeli raids in the West Bank. Israel has rejected similar proposals in the past, saying West Bank raids were critical to foiling Palestinian attacks.

''I intend to address the people of Gaza to explain to them that first and foremost they are the victims of the fanaticism of a few within them,'' Olmert told a group of Israeli mayors.

In fresh violence, Israeli soldiers crossed into the Gaza Strip and killed two Hamas militants near the border, drawing a vow from the armed wing of the Islamist group to hit back.

Several militants were detained by the force for questioning, an Israeli army spokesman said.

It was the second such ground operation in Gaza in the past week. The Izz el-Deen al-Qassam Brigades said it believed the Israeli force had planned to seize one of its members from his home when it encountered the gunmen.

The spike in rocket strikes against Israel has been accompanied by a dramatic decrease in Hamas-Fatah fighting, in which more than 50 Palestinians have died.

But in a development likely to stoke tensions between the two groups, Palestinian security forces loyal to Abbas said they discovered a tunnel near the main security complex in Gaza City.

REUTERS CS SBA BST0240