Israel and its Arab neighbours have agreed to resume long-dormant talks on co-operation at a meeting in Moscow.

A statement from the United States and Russia - talks co-sponsors - said four committees would hold a series of meetings in April and May to study regional problems such as water, Palestinian refugees, trade and the environment.

"The activities of the working groups can help lay the groundwork for greater regional co-operation and ensure that all the people of the Middle East reap the benefits from a new era of peace," the statement said.

But the success of the talks was tempered by an upsurge in fighting in Lebanon - which, along with Syria, maintained its boycott of the talks - and Egypt's refusal to resurrect a fifth working group on arms control and security.

Foreign Minister Amr Moussa told the conference Egypt wanted a regional plan to rid the Middle East of weapons of mass destruction. He called for Israel to submit to inspections of its suspected nuclear arsenal.

US Secretary of State Madeleine Albright urged Israel, Syria and Lebanon to show "maximum restraint" in the wake of a Hezbollah attack on Israeli forces in southern Lebanon.

Lebanon

As talks were going on in Moscow, Israeli warplanes carried out retaliatory raids on suspected guerrilla positions near the southern Lebanese town of Tyre, and shells pounded the surrounding areas.

Nevertheless, Mrs Albright was upbeat about the prospects for progress.

"It is obvious now that it [the multilateral track of the peace process] is operating alive and well and the issues which need to be discussed have been relaunched," she told a news conference.

She urged Syria to use its influence to rein in Hezbollah after three Israeli soldiers were killed on Monday. Syria is the main power broker in Lebanon, and has 30,000 troops stationed there.

Russian Foreign Minister Igor Ivanov said the multilateral meeting - which took four years to convene - had given a "hefty push" to efforts to build a peaceful Middle East. He called on Syria and Lebanon to take part in future meetings.

Meanwhile, Israeli Foreign Minister David Levy criticised Syria for staying away from talks with Israel which were to have resumed in the United States in January.

"Whoever plays with fire can also get burned," he told a separate news conference. "I hope that wisdom will guide Syria to return to the negotiations."

Along with the co-sponsors and representatives from the Middle East, the European Union, Japan, Canada, Portugal and Norway sent officials to Moscow.