Arabs in Egypt to hear Israel's plans for West Bank

SHARM EL-SHEIKH, Egypt, June 25 (Reuters) Arab leaders came to the Egyptian resort of Sharm el-Sheikh today to hear what Israel plans to do to make life easier for Palestinians living under Fatah control in the West Bank.

In return they will press Israeli Prime Minister Ehud Olmert to relaunch talks with Palestinian President Mahmoud Abbas and his Fatah movement on a long-term peace agreement, leaving aside the Hamas Islamists who have taken control of the Gaza Strip.

Abbas and Egyptian President Hosni Mubarak arrived in Sharm el-Sheikh in the early afternoon. Olmert and King Abdullah of Jordan are expected to join them later in the day.

The talks between Olmert and Abbas will be the first since Hamas defeated Fatah forces in Gaza, leading to a political split between the two Palestinian territories.

In a speech in Jerusalem, Olmert said he hoped his meeting with Abbas would spread a spirit of peace across the region, but he played down any expectations of a breakthrough.

The release of an audiotape with the voice of captured Israeli soldier Gilad Shalit overshadowed the summit preparations at the last minute. Gunmen from Gaza abducted Shalit exactly one year ago and negotiations to free him have failed.

Ahead of the summit, Israeli officials said Israel was reluctant to remove roadblocks and other West Bank restrictions to boost Abbas's new emergency government, shorn of Hamas Islamists, until he does more to curb militants.

Israel has however agreed to resume transfers of Palestinian tax revenue transfers to Abbas's government. An official said about 350 million dollars, short of the 700 million dollars sought by the Palestinian president, would be given in stages, once a mechanism is in place to ensure the money would not reach Hamas.

LONG-TERM DEMANDS Olmert, speaking in broadbrush terms, said it was important for Arab nations to see all four leaders ''expressing a genuine desire to build up a process'' focusing on peacemaking.

''This is the thrust of this evening's meetings and I hope that it will help project that spirit across the entire Middle East in order to move forward,'' he said.

''Where we can be flexible, where we can show a degree of generosity, where we can establish an environment of goodwill, there, I think, we should do it. And this is the true basis upon which we will move forward in the near future.'' Olmert said.

But the Arab governments have made clear they have long-term demands which Israel seems reluctant to address.

Senior Abbas aide Saeb Erekat said: ''The important thing for President Abbas is to revive the peace process and the political negotiations in order to end the Israeli occupation and establish a Palestinian state.'' The Egyptian hosts said yesterday that Israel should pave the way for peace talks with Palestinians by meeting longstanding Palestinian demands on Jewish settlements and the barrier it is building through the West Bank.

Foreign Minister Ahmed Aboul Gheit said Israel should stop work on the settlements and on the barrier, remove checkpoints in the West Bank and end raids into Palestinian towns.

Jordanian government spokesman Nasser Joudeh said Jordan welcomed the release of Palestinian money but this could not be divorced from political requirements and a start to negotiations on a final settlement of the Israeli-Palestinian conflict.

Olmert said yesterday he would present security demands to Abbas.

Israel's goal is to isolate the Gaza Strip economically, diplomatically and militarily, while allowing funds to flow to Abbas's new administration in the West Bank.

Egypt and Jordan have expressed support for Abbas as the legitimate Palestinian leader but Egypt has shown some concern about Israel's plans to seal off supplies to Gaza.

Aboul Gheit said it would be unacceptable to punish the Palestinian people in Gaza.

REUTERS SKB BD1940