ISRAEL EASES HARD LINE ON PALESTINIANS

Israeli Prime Minister Ehud Olmert made several concessions to the Palestinians on Saturday, including the release of $100 million in taxes and duties Israel had collected for their treasury but withheld for months, in a bid to revive a peace process stalled for years.

Olmert also promised, in a dinner meeting at his office with Palestinian Authority President Mahmoud Abbas, to begin easing travel restrictions on Palestinians in the West Bank and allowing more trucks through Israeli cargo crossings to and from the West Bank and Gaza Strip.

The Israeli leader came to office in March saying that peace talks were pointless because there was no strong, reliable partner on the Palestinian side. By engaging Abbas, a relative moderate, Olmert has made a politically risky about-face in an attempt to isolate the more militant Hamas movement that controls the Palestinian government and parliament.

The confidence-building steps announced Saturday night do not address the main issues of a conflict that is nearly six decades old. But both sides promised to build on the two-hour summit, the first formal meeting between Israeli and Palestinian leaders in nearly two years.

“The two leaders expressed their will to cooperate as true partners” toward the goal of “two states living side by side in peace,” said a statement issued by Olmert’s office. Saeb Erekat, an aide to Abbas who attended the dinner, said the two agreed to hold more meetings but set no timetable.

Israeli-Palestinian peace talks broke down six years ago with the start of a Palestinian uprising. Abbas and then-Israeli Prime Minister Ariel Sharon met to arrange a cease-fire in February 2005, but it collapsed.

After indirect talks produced a cease-fire in the Gaza Strip last month, Olmert offered to meet Abbas face to face if the Palestinians freed an Israeli soldier captured in June and formed a new government that recognized Israel and renounced violence.

But Abbas, who leads the Fatah party, has been unable to take either step. Hamas, sworn to seek Israel’s destruction, has balked at Abbas’ power-sharing plan and refused to release captured Cpl. Gilad Shalit unless Israel frees hundreds of Palestinian prisoners.

In a tactical shift, Olmert decided to meet Abbas anyway and try to sideline Hamas.

Israel’s main concession Saturday would channel the promised $100 million through the Palestinian Authority president’s office for hospitals, medical supplies and other humanitarian needs as soon as the two sides worked out safeguards for keeping the money out of Hamas’ hands.

Such an arrangement would turn Abbas’ office into a kind of shadow government, potentially enhancing his authority but also aggravating a conflict between Hamas and Fatah that has turned violent recently, claiming 17 lives this month.

The two leaders also agreed that Abbas’ presidential guard would deploy troops along the Gaza Strip’s southern border with Egypt, where Hamas has been smuggling weapons.

A Hamas spokesman, Ismail Radwan, dismissed the summit meeting, saying the two leaders ignored the Palestinians’ “legitimate demands” for the return of Israeli-occupied territory.

“We don’t attach high hopes to such meetings,” the Hamas website quoted him as saying.

The money Olmert offered to release represents two months’ worth of tax and duty collections, or about one-fifth of the $500 million Israel is withholding from the Palestinian Authority.

Israel stopped handing over the money after Hamas, which it considers a terrorist group, came to power. For the same reason, the United States and other Western countries have also blocked payments to the Hamas-led government, leaving it incapable of paying its 165,000 employees in full and creating labor and social unrest.

In the meeting, Olmert announced two other steps, his office said.

He instructed the army to lift some of the roadblocks in the West Bank and to submit a plan for removing others, allowing Palestinians there to travel more easily.

Several hundred such barriers limit and slow travel within the West Bank, a major grievance for Palestinians trying to get to jobs, schools and family members. The Israeli military says the restrictions, imposed in response to the uprising that erupted in 2000, have reduced the number of deadly attacks by Palestinian suicide bombers.

Olmert also agreed to speed up Israel’s security inspections at the cargo crossings to and from the West Bank and Gaza Strip in order to meet a goal of allowing 400 truck crossings per day.

Erekat, the Abbas aide, said Israel had been permitting an average of 12 crossings per day, severely limiting commerce in the Palestinian territories.

Abbas and Olmert also agreed to revive several dormant cooperation committees, including one that is to draw up a list of Palestinian prisoners to be released by Israel.

But Olmert insisted that Israel would free no prisoners until Shalit was home safely. And he resisted Abbas’ proposal to extend the month-old Gaza cease-fire to the West Bank, noting that militants continued to violate it by firing crude Kassam rockets into Israel from northern Gaza.

“The prime minister made it clear that Israel cannot restrain itself indefinitely,” said Miri Eisen, a spokeswoman for Olmert.

About 50 such rockets have been fired during the cease-fire by militant groups independent of Hamas, which say they are responding to Israeli military action in the West Bank.

Erekat said an expanded cease-fire was the main goal of the meeting for Abbas, who is also known as Abu Mazen.

“Abu Mazen understands that this meeting cannot deliver more than what is possible,” Erekat told reporters in the West Bank city of Ramallah. “He does not want to raise anyone’s expectations of what we can achieve.”

Olmert came under fire at home from the left and the right.

Gideon Saar, leader of the right-wing Likud Party in parliament, said Olmert’s “unilateral concessions” reflected weakness.

“He cannot keep one principle for more than a week,” Saar said. “While Kassams continue to fall and Gilad Shalit remains captive, Olmert is giving the Palestinian Authority money and laying the guidelines for releasing Palestinian prisoners.”

Peace Now, an Israeli pacifist group, said Olmert’s gestures were too little and too late to bolster Abbas’ sagging authority in the power struggle with Hamas.

A week ago, Abbas called for early elections, including for his office, in an effort to oust Hamas and clear the way for peace talks with Israel. But the subsequent clashes between Hamas and Fatah gunmen have made it clear that he will not be able to hold elections if Hamas remains opposed to such a move.

Any breakthrough in the talks with Abbas could help Olmert overcome his own political problems at home.

Olmert has been struggling to reverse a decline in his popularity that occurred during the summer’s war in Lebanon with Hezbollah guerrillas, which ended inconclusively. The war discredited Olmert’s political program, a promise to redraw Israel’s borders unilaterally without waiting for a peace accord.

boudreaux@latimes.com

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Times special correspondent Maher Abukhater in the West Bank city of Ramallah contributed to this report.