Palestinian-Israel talks revived as Gaza calm sought

By Sue Pleming and Dan Williams

JERUSALEM (Reuters) - Israel and the Palestinians agreed to resume peace talks on Wednesday under pressure from U.S. Secretary of State Condoleezza Rice, but progress appeared to hinge on stemming bloodshed in the Hamas-run Gaza Strip.

Signaling a willingness by Israel to hold fire after a Gaza offensive that killed more than 125 Palestinians and stalled negotiations, Prime Minister Ehud Olmert said there would not be further such attacks if Palestinian rocket salvoes were to stop.

Rice ended a three-day troubleshooting visit in the region by dispatching an envoy to Cairo, a key player in trying to broker any calm between the Jewish state and Islamist Hamas.

Hamas's Western-backed rival, Palestinian President Mahmoud Abbas, had said he would not return to statehood talks with Olmert until Israel reached a ceasefire in Gaza. Palestinian officials said Egypt would present a truce proposal next week.

Rice, her own credibility on the line, thought early on Wednesday she had a deal with Abbas but, on hearing news reports his participation was still conditional, interrupted lunch with Israeli Foreign Minister Livni to call him for clarification.

"I talked directly with President Abbas. He said there was not to be a condition," Rice told reporters traveling with her after she left Israel for a NATO meeting in Brussels.

Only after speaking to Abbas for a second time did she feel confident to make the announcement at the news conference.

"I do understand the difficult circumstances for President Abbas but I think he has made the right decision," said Rice.

Rice did not say when the next round of talks would be held. The United States hopes negotiations could result in an accord before U.S. President George W. Bush leaves office in January.

Israel called its five-day Gaza sweep, half of whose Palestinian victims were identified by hospitals as civilians, a response to rocket strikes by Hamas. A rocket killed an Israeli civilian last week and two soldiers died fighting Gazan gunmen.

Olmert told reporters on Wednesday after meeting Rice: "One thing should be clear: If there is no Qassam (rocket) fire on Israel, there will be no Israeli attack on Gaza. We do not rise in the morning and think about how to attack Gaza."

HAMAS COOL ON OVERTURE

Hamas was cool to Olmert's overture, though its rocket fire has largely abated since Israeli troops withdrew on Monday.

Another militant group, Islamic Jihad, fired several rockets on Wednesday, calling them retaliation for a Israeli commando raid on Gaza overnight. No one was hurt by the salvo.

"We want deeds, and not words. There must be a total cessation of all forms of Israeli aggression on our people, in addition to a reopening of all crossings," Hamas official Sami Abu Zuhri told Reuters, referring to an Israeli-led blockade on Gaza, most of whose 1.5 million Palestinians are aid-dependent.