Abbas rejects Olmert's idea of interim peace deal

RAMALLAH, West Bank (Reuters) - President Mahmoud Abbas told Israeli Prime Minister Ehud Olmert at a summit on Sunday he was still committed to a comprehensive peace deal but ruled out any partial agreement, a Palestinian negotiator said.

Saeb Erekat told reporters in the West Bank city of Ramallah that Abbas had told Olmert during talks in Jerusalem Palestinians "will not be part of any interim agreement. Either everything will be agreed or nothing will be agreed."

Erekat added: "Our position is clear to all. We are seeking an agreement but not at any cost."

Ahead of the meeting in Jerusalem, Olmert aides said the Israeli leader, poised to resign next month in a graft scandal, planned to ask Abbas to draft a joint document of understandings before his Kadima party votes on September 17 to name his successor.

But Olmert's spokesman Mark Regev said after the meeting: "It is not realistic to expect that there's a quick fix or a shortcut. We won't solve the conflict issues on the table in two or three weeks."

Olmert appeared to catch Abbas off-guard during a photo opportunity before the talks by stressing the 2008 timeframe for a deal, set at a U.S.-sponsored peace conference in Annapolis, Maryland last November.

"We have to complete the Annapolis process this year -- this year," Olmert, grasping Abbas in a handshake and using his other hand to gesture to the Palestinian leader, said emphatically in English as they posed for photographers.

Such comments have been rarely made on camera during previous meetings between the two men.

Abbas, along with some of Olmert's cabinet colleagues, are cool to the idea of pushing through a preliminary peace deal simply to meet Washington's goal of an agreement by year's end.

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Tzipi Livni, Israel's foreign minister and front-runner in the Kadima race, has cautioned against papering over differences with Abbas and rushing towards an accord. Her comments were echoed by U.S. Secretary of State Condoleezza Rice during a Middle East visit last week.

Cabinet minister Eli Yishai of the ultra-Orthodox Shas party said Olmert doesn't have "legal legitimacy to negotiate, and certainly not to reach any agreement".

Olmert, who was questioned again by police on Friday over corruption allegations, could stay in office for weeks or even months until his successor forms a new government. He has denied any wrongdoing.

A senior Abbas aide said Rice had proposed several bridging proposals during her 25-hour visit last week and they would be discussed at the Olmert-Abbas meeting in Jerusalem.

They included working out a territorial swap and basing the borders of a future Palestinian state on lines that existed before Israel captured the West Bank in a 1967 war, while taking into account several major Jewish settlement blocs.

The issue of Jerusalem would be resolved as part of the borders debate but holy sites and the walled Old City where they are located would be discussed at a later stage, the aide said.

On the fate of Palestinian refugees, the aide said the United States would work internationally to provide them with compensation and discussions would begin on deciding how many could return to what is now Israel.

(Additional reporting by Allyn Fisher-Ilan and Ari Rabinovitch in Jerusalem; Writing by Jeffrey Heller and Joseph Nasr, Editing by Mary Gabriel)