Olmert Travels to Jericho for First Talks in Palestine in Seven Years

For the first time in seven years Israeli and Palestinian leaders met for talks in the Palestinian territories yesterday, the latest round in a wave of Middle East diplomacy.

Ehud Olmert, the Israeli prime minister, said he intended to discuss "fundamental issues" with the Palestinian president, Mahmoud Abbas, at the meeting in the InterContinental Hotel in Jericho.

The two talked for three hours about the outlines of a future Palestinian state as well as more immediate concerns, including economic issues, possible prisoner releases, checkpoints and humanitarian needs. But an Israeli official later said the talks had stopped short of negotiations over the core issues of a future peace deal: the future borders of a Palestinian state, the removal of settlements, the fate of refugees and the future of Jerusalem.

Mr Olmert said before the meeting: "I came here to discuss the fundamental issues outstanding between Israel and the Palestinian Authority, hoping that this will lead us soon into negotiations about the creation of a Palestinian state."

In the coming days joint security committees between the two sides will talk about several issues, including the hundreds of Israeli military checkpoints across the occupied West Bank.

Reports have suggested the Israelis have proposed an "agreement of principles", which includes less controversial areas such as the outline of a future Palestinian state, the shape of its economy, its institutions and customs agreements. The recent wave of diplomacy, with repeated visits to the Middle East from the US secretary of state, Condoleezza Rice, comes ahead of a regional conference on the Israeli- Palestinian conflict to be hosted by the US this autumn.

Mr Olmert traveled by a heavily guarded motorcade to Jericho, near the Dead Sea. Israeli troops sealed off checkpoints and Palestinian police were deployed on the roads. It was the first time since 2000 that Israeli and Palestinian leaders have met in the occupied territories.

Saeb Erekat, the chief Palestinian negotiator, said the meeting was "serious, deep and positive". He said: "We are seeking negotiations to go back to the pre-1967 borders and to a final status for a Palestinian state based on international resolutions." But he said the Palestinian side was frustrated with the lack of concrete results. "I think now it is about taking decisions at the leadership level."

Israel argues that it has made several gestures to the Palestinians in recent weeks, including releasing some of the Palestinian tax revenues that it froze early last year, freeing about 250 Palestinian prisoners, and announcing an amnesty for some Fatah militants in the West Bank.

Last week Ms Rice signed an agreement worth $80m (£39m) to provide training to Mr Abbas's security forces.