Israel says interested in talks with moderate Arabs

JERUSALEM (Reuters) - Israel said on Thursday it was interested in holding talks with moderate Arab states but stopped short of welcoming a renewed peace offer as did the United States.

Arab leaders earlier on Thursday endorsed a 5-year-old plan offering Israel normal ties with all Arab countries in return for its withdrawal from land seized in the 1967 Middle East war, the creation of a Palestinian state and a "just solution" for Palestinians displaced in 1948 with Israel's creation.

A statement issued by Israel's Foreign Ministry said "direct dialogue" between Israel and the Palestinians was necessary and that moderate Arab states can fill a "positive role by encouraging regional cooperation, and supporting the Israel-Palestinian track."

The statement stopped short of welcoming the Arab initiative itself. In contrast, the United States said it viewed the outcoming of the Arab summit as "very positive".

"Israel is sincerely interested in pursuing a dialogue with those Arab states that desire peace with Israel, this in order to promote a process of normalisation and cooperation," the Israeli statement. "Israel hopes that the Riyadh summit will contribute to this effort."

Israeli officials said their reaction was cool because the final declaration of the Arab leaders did not address Israeli concerns and did not explicitly call for creation of a committee that could negotiate details with the Jewish state and others.

Israeli Prime Minister Ehud Olmert issued a more upbeat statement earlier this week, saying, "If moderate Arab countries try to advance the process along the lines of the Saudi initiative, I would look at it as a very positive development."

An official in Olmert's office said the prime minister was studying the initiative.