Israel, Palestinian leaders agree to regular talks

JERUSALEM (Reuters) - Israeli and Palestinian leaders have agreed to hold confidence-building talks every two weeks that could eventually lead to discussions on a Palestinian state, U.S. Secretary of State Condoleezza Rice said on Tuesday.

Israeli Foreign Minister Tzipi Livni told European lawmakers Israel had agreed "to conduct a dialogue on the conditions for establishing a Palestinian state", a ministry statement said.

Israel, Livni said, would present its "security needs". She signaled there could be no shortcuts to statehood and called for the terms of a long-stalled U.S.-backed peace "road map" to be met.

These conditions include dismantling Palestinian militant groups and halting Israeli settlement building in the occupied West Bank.

Other Israeli officials cited disagreements between Olmert and Rice over the scope of the deliberations.

A senior Israeli official said substantive talks on statehood between Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas would not be on the agenda for now.

"The issues would be security, humanitarian and the political horizon," the official said in a loose reference to a U.S.-backed vision of a Palestinian state alongside a secure Israel.

"Political horizon is not about specifics," the official added, appearing to rule out discussion soon on core issues such as the future of Jerusalem, the borders of a Palestinian state and the fate of Palestinian refugees.

On her fourth visit in four months, Rice tried to revive peace hopes dimmed last year by the establishment of a Hamas-led government and further complicated by the creation this month of a unity administration with Abbas's Fatah faction.

The power-sharing partnership has not met demands by a Quartet of Middle East mediators to recognize Israel, renounce violence and accept existing interim peace accords.

At a news conference postponed from Monday evening after discord with Olmert, Rice said the prime minister and Abbas "have agreed that they plan to meet together bi-weekly".

"We are not yet at final-status negotiations. These are initial discussions to build confidence," Rice said. Her visit ended a day before Arab states open a summit in Riyadh where they intend to relaunch a 2002 plan for peace with Israel.

Olmert told reporters on Monday he would maintain constant contacts with Abbas but did not say how frequently they would meet. The Israeli leader said after the unity government was inaugurated he would limit such talks to humanitarian issues.

His agreement to see Abbas regularly appeared to be a gesture to Washington, which is eager to show the Arab world and European allies it is trying to end the Israeli-Palestinian conflict.

"DIFFERENT MOOD"

Saeb Erekat, a senior adviser to Abbas, said Rice "managed to keep the door open between us and the Israelis which was closing rapidly in the past few days".

A senior U.S. official, briefing reporters on Rice's plane after she left Israel, said he detected a new willingness on the part of Olmert's government to engage Abbas.

"There really was a different mood, a willingness to try and see what this track can produce," said the official, who spoke on condition of anonymity because he was discussing confidential diplomatic exchanges.

Rice said Abbas and Olmert would focus on security issues but also "begin to discuss the development of a political horizon consistent with the establishment of a Palestinian state in accordance with the 'road map'".

The broader Arab League proposal that will be a focus of the Riyadh summit offers Israel normal ties in return for a full withdrawal from land it captured in the 1967 Middle East war.

"Such bold outreach can turn the Arab League's words into the basis of active diplomacy and it can hasten the day when the state called Palestine will take its rightful place in the international community," Rice said.

(Additional reporting by Adam Entous)