Palestinians fret over Olmert police inquiry

RAMALLAH, West Bank (Reuters) - Palestinian officials voiced concern on Friday that a new bribery scandal involving Israeli Prime Minister Ehud Olmert could derail U.S.-sponsored talks on establishing a Palestinian state.

Chief negotiator Ahmed Qurie insisted that President Mahmoud Abbas's team viewed it as an internal Israeli affair and said he hoped it would not affect the process, even if Olmert was forced to quit over allegations he accepted illegal cash contributions.

But privately Palestinian officials acknowledged they were troubled. If Olmert's fragile coalition fell apart, an Israeli election would probably render unrealistic a deadline set by the talks' sponsor, U.S. President George W. Bush, for reaching a deal on statehood before Bush leaves office in January.

"Of course we are worried," one senior official said.

Palestinian leaders have already said they are skeptical that the deadline can be met.

Qurie, also known as Abu Ala, told Reuters: "We are negotiating with an Israel government and not with a person.

"The Israeli government and the Israeli institutions should remain ready to continue the peace process. A great process like this cannot be dependent on a single person.

"What is happening in Israel is an internal matter ... but we hope it won't affect the peace process."

Qurie said he was planning further meetings with Israel's chief negotiator, Foreign Minister Tzipi Livni, but declined to say when. Bush is due to visit Israel from Wednesday to Friday and then to meet Arab leaders in Egypt after that.

Olmert has said he will resign only if indicted. The most likely successor in the short term is Livni. However, opinion polls suggest that any election would be won by the right-wing Likud party led by Benjamin Netanyahu, who has already voiced strong reservations about Olmert and Livni's talks with Abbas.