Olmert, Abbas disuss "fundamental issues" for state

JERUSALEM, Aug 28 (Reuters) Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas discussed issues fundamental to Palestinian statehood in two hours of talks today, an Israeli government spokesman said.

Olmert hosted Abbas, whose Fatah faction lost control of the Gaza Strip to Hamas Islamists in fighting in June, at his official Jerusalem residence. They last met three weeks ago in the West Bank town of Jericho.

''They spoke about fundamental issues which would lead to the establishment of two states for two peoples,'' said the Israeli spokesman, David Baker, declining to define the subjects.

Abbas has been pressing for the highly contentious matters of borders and the future of Jerusalem and Palestinian refugees to be included in his discussions with Olmert and for the issues to be tackled by a US-sponsored Middle East conference.

On the eve of his talks with Olmert, Abbas said the international gathering expected in November would be a waste of time if Israel pressed ahead with plans to pursue only a broadbrush ''declaration of principles''.

Israeli officials have used that phrase to describe what Olmert might offer in answer to calls for rapid, final talks in detail on establishing a Palestinian state.

Israeli political commentators said Olmert, weakened by the failings of his government and the military in last year's Lebanon war, was in no rush to take on such issues in depth and risk splitting a cabinet that includes the far-right.

Baker described the two-hour, ''one-on-one'' meeting between Olmert and Abbas as ''very constructive, postive and open''. There was no immediate comment from Palestinian officials.

HAMAS CRITICISM The United States hopes the Middle East conference President George W Bush has called can expedite Palestinian statehood despite the current split between the West Bank, where a Fatah-backed government holds sway, and Hamas-run Gaza.

Hamas called the Abbas-Olmert meeting another attempt to isolate it.

''The meeting will end in complete failure. Such meetings can never achieve anything as long as the Israeli occupation continues to deny the rights of our people and continues its aggression against them,'' said Sami Abu Zuhri, a Hamas official.

Hamas is shunned by the West over the group's refusal to recognise Israel, renounce violence and accept existing interim Israeli-Palestinian peace deals.

In a sign of low public expectations in Israel, the country's most popular newspaper, Yedioth Ahronoth, relegated news of the Olmert-Abbas meeting to page eight.

Abbas said before today's meeting that he would again address ways of easing the effects of Israeli occupation of the West Bank.

Palestinians accuse Olmert of failing to deliver on what they say were promises at earlier meetings to revise travel restrictions in the territory and scrap some of the checkpoints choking their movement between towns and villages.

Citing security concerns, Israeli Defence Minister Ehud Barak has balked at rapid removal of roadblocks -- a move that could bolster Abbas in his rivalry with Hamas.

''The prime minister (told Abbas) he would soon present a plan being prepared by the Israeli security establishment which would allow for freedom of movement between the West Bank cities,'' Baker said after today's meeting.

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