Page last updated at 11:46 GMT, Monday, 28 July 2008 12:46 UK

Israeli PM downbeat on peace deal

Israeli PM Ehud Olmert
Olmert said there had been progress on core issues other than Jerusalem

Israeli PM Ehud Olmert has said he does not believe a peace settlement, including Jerusalem, can be reached with the Palestinians this year.

The deadline was set at a US-sponsored summit at Annapolis in November 2007.

US officials still say they hope a deal can be reached by the time President George W Bush leaves office in January.

Mr Olmert told an Israeli parliamentary committee that there was no practical chance of reaching a deal that would include an understanding on Jerusalem.

Palestinian officials blame Israel for what they say is a lack of progress in peace talks. Specifically, they say that the continued building of settlements has undermined Palestinians who back talks with Israel.

Palestinians want to establish a capital for their future state in East Jerusalem.

A senior Palestinian spokesman, Nabil Abu Rudeina, said:

"Olmert's statements [on East Jerusalem] are an attempt to run away from the commitments of the Annapolis conference and the vision of President Bush.

"The American administration must work to push Israel to enter into serious negotiations and stop wasting time."

New 'mechanism' proposed

"I don't believe that understandings that will include Jerusalem can be reached this year," Mr Olmert was quoted as saying by an Israeli official present at the closed-door committee meeting.

The Israeli prime minister pointed to areas of progress, saying that on the other core issues "the gaps are not dramatic".

The core issues are normally understood to be the borders of a Palestinian state, settlements in the West Bank, refugees, security, water resources and the status of East Jerusalem.

Instead of a deal including East Jerusalem, officials said, Mr Olmert is proposing an Israeli-Palestinian "mechanism" to continue negotiations on the future of the city into 2009.

US Secretary of State Condoleezza Rice is scheduled to host a three-way meeting with Israeli and Palestinian negotiating teams in Washington later this week.

Israel has occupied East Jerusalem since 1967, annexing it and surrounding it with a ring of settlements.

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