Rice holds Mid-East peace talks

Bilateral talks were hastily arranged after the latest moves

US Secretary of State Condoleezza Rice has held talks with Palestinian and Israeli leaders in the hope of building on recent peace overtures.

Speaking after their meeting in Jericho, Mahmoud Abbas said his priority was to lift international sanctions on Palestinian territories.

Ms Rice said she hoped a militant ceasefire in Gaza could be extended into a comprehensive truce.

She urged an easing of the humanitarian situation in Palestinian territories.

The trip was hastily arranged, days after Mr Abbas helped broker a ceasefire by Palestinian militant groups and Israeli Prime Minister Ehud Olmert reciprocated by delivering a speech widely seen as more conciliatory towards the Palestinian Authority.

Captured soldier

In a gesture towards Mr Abbas, Ms Rice said Palestinian "humiliations" under Israel's occupation must be eased and no actions should be taken to prejudge the outcome of a final peace deal.

This was taken as a reference to Israeli settlement activity in the occupied West Bank.

Our experience with these meetings are that they justify more Israeli aggression against our people Palestinian Foreign Minister Mahmoud Zahhar

Mr Abbas, for his part, said efforts to form a unity government with the Hamas militant group had reached a dead end - a statement likely to please his American guest.

Afterwards, Ms Rice travelled on to Jerusalem for talks with Mr Olmert and her Israeli counterpart Tzipi Livni.

She was briefed on efforts to release an Israeli soldier captured by Palestinian militants in June in a move that sparked four months of bitter conflict in the Gaza Strip.

She praised Mr Olmert's speech on Monday as "very positive" and "a hand reaching out to a Palestinian partner".

Israeli officials say extending the ceasefire to the West Bank and easing restrictions on Palestinians there depends on what happens in the Gaza Strip.

Unity efforts

Earlier Ms Rice had attended a US-Iraqi summit in Jordan, where President George W Bush said the Palestinian Authority President Abbas deserved global support for his political programme.

Mr Abbas has been holding lengthy negotiations to replace the current government, led by Hamas, with a unity coalition willing to enter talks with Israel.

Foreign Minister Mahmoud Zahhar of Hamas dismissed the Abbas-Rice meeting as unhelpful to the Palestinian cause.

"Our experience with these meetings and these visits are that they justify more Israeli aggression against our people," Mr Zahhar said.

In his address on Monday, Mr Olmert offered economic and humanitarian incentives if Palestinians ended violence, released the captive Israeli soldier and resumed peace negotiations.