Rival Palestinian leaders have signed an agreement on a power-sharing government in Saudi-brokered talks.

Israeli and Palestinian leaders will hold talks in about two weeks in a meeting with US secretary of state Condoleezza Rice, an Israeli official said today.

A slip of the tongue by prime minister Ehud Olmert about Israel’s nuclear policy ballooned into a domestic crisis today for the already embattled Israeli leader.

The Palestinian prime minister said militants were prepared to stop barraging Israel with rockets if Israel would halt all military action in Palestinian territories.

The Israeli Cabinet today voted overwhelmingly to bring into the government a hawkish party that opposes ceding territory to the Palestinians and wants to redraw Israel’s borders to exclude many Israeli Arabs.

Hamas officials today gave Palestinian President Mahmoud Abbas the go-ahead for negotiations with Israel, a major shift in the militant Islamic group’s position toward the Jewish state as it worked to end its international isolation.

Israeli prime minister Ehud Olmert and British leader Tony Blair will discuss how Israel can proceed with the Palestinians when the two meet in Jerusalem tomorrow, government spokeswoman Miri Eisin said today.