Palestinians say Bush will meet Abbas in Egypt

RAMALLAH, West Bank (Reuters) - Plans are under way for President George W. Bush to meet Palestinian President Mahmoud Abbas and possibly other Arab leaders in Egypt next month, diplomats and Palestinian officials said on Wednesday.

Such a summit, in Egypt's Red Sea resort of Sharm el-Sheikh, would take place after Bush visits Israel to celebrate its 60th anniversary.

"The meeting in Sharm el-Sheikh could include leaders of Egypt, Jordan and Israel, or it could be confined to Arab leaders from countries such as Jordan, Egypt and maybe Saudi Arabia," said Nimmer Hammad, a senior Abbas aide.

U.S. officials and Israeli Prime Minister Ehud Olmert's office had no immediate comment.

A diplomat involved in preparations for a gathering in Egypt said it would be held on May 18.

"The meeting would focus on how to help Israel and the Palestinians reach an agreement on final status by the end of 2008," he said.

Bush, who has voiced confidence Abbas and Olmert could reach a peace deal by the time he leaves office in January, is expected to visit Israel in mid-May, soon after hosting the Palestinian leader in Washington.

A senior U.S. official said last week that Bush would not go to the Palestinian territories during his second presidential trip to the region this year.

A Palestinian official said a visit by Bush to the occupied West Bank following his participation in Israeli Independence Day celebrations would "anger the Palestinian public and undermine President Abbas".

Bush launched final-status talks between Israel and the Palestinians at a peace conference in Annapolis, Maryland in November.

But talks on sensitive issues such as Jerusalem, borders, Palestinian refugees and Jewish settlements have shown no visible progress.

A meeting between Olmert and Abbas on Monday, their first in six weeks, "was bad and very tense", one Abbas aide said.

"The two sides have been talking regularly for months now and they still haven't started drafting. The gaps are wide, specifically on Jerusalem and refugees," he said.

"But the Americans are hopeful an agreement can be reached and tell us we still have eight months of talks before the end-of-the-year target date," the aide said.

(Editing by Andrew Roche)