Israel and Palestine Fail to Agree Before Conference

A meeting between Israeli and Palestinian leaders has failed to produce a joint declaration for a Middle East summit due next week in the United States, after they could not resolve key differences.

Although Israel announced the release of 441 Palestinian prisoners, and despite more than two hours of talks in Jerusalem between the prime minister, Ehud Olmert, and Palestinian president Mahmoud Abbas, there appeared to remain serious differences between the two sides ahead of the meeting in Annapolis. Their aides will hold more meetings today.

The declaration that diplomats originally expected Israel and the Palestinians to agree on, so that it could be read at Annapolis, has yet to be agreed. Palestinian sources said they rejected earlier drafts, which failed to mention key UN Security Council resolutions that are principles to ending the conflict.

Ehud Barak, the Israeli defense minister, said the conference could still go ahead without a declaration. Yesterday, Olmert announced the release of prisoners - who are all members of Abbas' Fatah movement - and also repeated a government promise to remove "illegal outposts", which are Jewish settlements in the occupied West Bank that are not authorized by Israel. He said Israel would not build more settlements, but stopped short of announcing a freeze of activity in all settlements, a road map commitment.

"Olmert has to understand he either declares a full settlement freeze in all occupied areas including East Jerusalem, or it's nothing," said Saeb Erekat, a senior Palestinian negotiator.

The Olmert announcement was welcomed by the Arab League, which must decide on Thursday whether to attend the Annapolis talks. Amr Moussa, the Arab League secretary-general, told journalists in Cairo that the details of the Olmert offer would have to be made clear, but added: "We hope that it will produce a commitment." "I feel some encouragement," Moussa concluded, adding that any Arab League delegation to Annapolis would be on the level of foreign minister. Olmert is due to fly to Egypt today.

Moussa was speaking after meetings yesterday with Britain's foreign secretary, David Miliband, who spent three days in the region. "It's noteworthy that [the announcement] is being made a week before conference, and not being held back until the weekend," Miliband, who will be attending the Annapolis conference, said.

The foreign secretary also assured Syria that its desire to discuss the disputed Golan Heights would be accommodated if Damascus sent a delegation. "I think ... Syria will be able to make their points, without losing sight of the fact that the issue at the heart of the conference is the creation of an independent Palestinian state living next door to a secure Israel," Miliband said.

Tony Blair, now working on improving the Palestinian economy, announced that the two sides had agreed work could begin on four projects intended to restart economic growth in the Palestinian territories. The projects cover a sewage treatment plant in northern Gaza, an agro-industrial park near Jericho, an industrial zone near Hebron and improved access to Bethlehem for tourists. More proposals will follow.

"The political vision, building of capacity for a Palestinian state, and the economic facts of what is happening, all three have to be dealt with," Blair said. "With these projects we found a way through."