Sides to pursue Mideast peace despite Olmert move

By Dan Williams and Susan Cornwell

WASHINGTON (Reuters) - Israeli and Palestinian officials pledged on Wednesday to keep trying to achieve a peace accord by a U.S.-set deadline of year's end despite Israeli Prime Minister's Ehud Olmert's decision to step down.

Olmert's announcement that he plans to resign after his ruling party chooses a new leader in September overshadowed a three-way meeting between U.S. Secretary of State Condoleezza Rice and the top Israeli and Palestinian peace negotiators.

"We decided today that we are going to continue pursuing to reach an agreement before the end of the year," Saeb Erekat, an aide to Palestinian negotiator Ahmed Qurei, said after the talks with Rice and Israeli Foreign Minister Tzipi Livni, the front-runner to succeed Olmert.

"At the end of the day, as Palestinians we want to make peace with all Israelis, not with this party or that person," he told reporters, adding that Rice was expected to return to the region on August 20 for further discussions.

There is deep skepticism that an agreement to end the six-decade conflict is possible this year both because of the political upheaval in Israel, where Olmert has been dogged by scandal, as well as the deep divisions among the Palestinians.

Olmert has been negotiating with Palestinian President Mahmoud Abbas, whose Fatah party holds sway in the West Bank but lost control of the Gaza Strip more than a year ago when Hamas seized the Mediterranean coastal strip by force.

Despite the long odds of meeting U.S. President George W. Bush's goal to strike a deal this year, Rice said she would press ahead, a sentiment echoed by the White House.

"The issues are difficult and they have always been difficult, there is nothing surprising in that, but ... the goal remains the same," Rice told reporters after her talks.

SWORD AT THE NECK?

Erekat, however, suggested the Palestinians would not allow the deadline to push them into a piecemeal deal, saying they sought agreement on all final status issues or none at all.

Those issues include the delineation of borders, the fate of Palestinian refugees and the status of Jerusalem.

Olmert said on Monday a full agreement that includes Jerusalem was not within reach this year but it was possible that differences over borders and refugees could be bridged.

"We will not allow time to be the sword (at) our necks," Erekat told reporters. "Substance is very important."

The trilateral talks were the latest in a series Rice has convened this year but, like the Israeli-Palestinian bilateral negotiations, have yet to produce tangible progress toward ending the conflict.

Livni is one of four Kadima ministers who have launched a campaign to replace Olmert because of corruption scandals. She is seen as the likeliest successor from within Olmert's party.