Israel to Europe Hamas-Fatah talks a '''huge mistake''

JERUSALEM, Aug 14 (Reuters) Israel said today it would be a ''big mistake'' for the international community to try to bridge differences between Hamas Islamists and Palestinian President Mahmoud Abbas's secular Fatah faction.

Israeli Foreign Minister Tzipi Livni was responding to calls from Italian Prime Minister Romano Prodi and British parliamentarians for dialogue with Hamas, whose fighters routed Fatah and seized control of the Gaza Strip in June.

''I know that it looks tempting and I know that the international community is eager to see a kind of an understanding between Hamas and Fatah,'' Livni told a news conference with visiting Japanese Foreign Minister Taro Aso.

''This is wrong. This is a mistake. Big mistake. Huge,'' Livni said, tapping the table for emphasis.

Israel and the United States have tried to isolate Hamas in Gaza while opening economic and political taps to support Abbas and his Western-backed government in the occupied West Bank.

Livni said the international community's role was critical and ''any compromise with terror, any compromise with these extremists, can lead to undermining the new government in the Palestinian Authority''.

''The idea is that now there is a chance in the dialogue between Israel and the new Palestinian government. We can reach something. It's there,'' Livni said.

Steny Hoyer, the majority leader in the Democratic-led US House of Representatives, emerged from a meeting with Palestinian Prime Minister Salam Fayyad voicing confidence Fatah would not seek a new unity pact with Hamas.

''Mr Fayyad made it very clear that Hamas could not be and would not be a partner in moving forward,'' Hoyer told reporters.

US PRESSURE Israeli Prime Minister Ehud Olmert has been under pressure from the Bush administration to take more concrete steps to bolster Abbas before a U.S.-sponsored conference on the long-stalled peace process expected to take place in November.

The goal is an agreement on statehood principles.

''The idea is to reach the widest common denominator between Israel and the Palestinians,'' Livni said.

To bolster Abbas, Olmert has started releasing frozen tax funds, freed some Palestinian prisoners and agreed to hold talks on ''fundamental issues'' for establishing a Palestinian state.

During their meeting last week, Olmert assured Abbas he would begin to remove some of the roadblocks that restrict Palestinian travel in the West Bank, Palestinian officials said.

But senior Abbas aide Saeb Erekat, who had expected to receive a roadblock removal plan from Israeli Defence Minister Ehud Barak this week, said: ''They told us they're not ready yet.

I'm really disappointed.'' Israel's Yedioth Ahronoth newspaper on Friday quoted Barak as saying that he would not carry out Olmert's roadblock plan.

Barak was also quoted as dismissing as ''fantasies'' any talk of a peace deal with the Palestinians any time soon.

Israel says its checkpoints and unmanned roadblocks, usually piles of rubble on roads linking towns or villages in the West Bank, help prevent attacks by militants. Palestinians call them collective punishment.

Israel has promised to remove roadblocks in the past. Many of the promised changes were either never made or reversed.

REUTERS SBC KP2225