Talks offer 'sense of hope' for Mid-East
The Israelis said all sides agreed there was no need for them to attend the London gathering proposed by the British Prime Minister. However, Mr Blair insisted the event could act as a bridge back to the internationally agreed "Roadmap" peace settlement.
He was speaking after meeting Israeli Prime Minister Ariel Sharon and Mahmoud Abbas, the favourite to replace the late Palestinian leader Yasser Arafat, during a visit to the region.
Mr Blair said he was encouraged by their welcome for the London initiative, which will be held next March. The meeting was not an end in itself and could not replace the Roadmap agreed by the Quartet of the European Union, UN, US and Russia, he stressed. It was also not the forum to resolve disputes between the two sides.
Instead, it will focus on issues of security and political reform in the Palestinian Authority, which holds elections for the new chairman on January 9. Speaking in the West Bank, Mr Blair said: "Everyone is very well aware that this is an important time and it is an important opportunity.
"And after many months and years when it has been very difficult to see progress I think there is a great sense of hope that there can be progress. But, as we all know, having the hope is one thing, translating it into reality is another.
"I hope that this London conference can play some part in that."
Mr Abbas added: "We believe this conference will be a first step in achieving and consolidating the peace process.
"This conference will be an important opportunity for us Palestinians to pursue our work in reform, in administrative improvements."
Mr Blair said Mr Abbas understood the importance of the security issue, crucial to the Israelis.
The London talks could help develop the Palestinian institutions needed to create a viable state in the wake of elections, he said.
Earlier, Mr Sharon said the Palestinians had to end terror attacks before the roadmap was implemented. "Up until now, we don't see the slightest step on the part of Palestinians."
Mr Sharon's plan unilaterally to withdraw troops from the Gaza strip featured heavily in the two men's discussions.
Mr Blair said the disengagement would give impetus to a revival of the peace plan.
The prime minister's close ties to US President George W Bush assured him of a welcome from the Israelis in Jerusalem. This has led to suspicion among ordinary Palestinians, but officials hope he can make their voice heard in the White House.
Mr Blair took time during his trip to pay his respects at the grave of Mr Arafat along with Mr Abbas.
He was the first world leader to visit the West Bank since the death of Mr Arafat, who was revered among Palestinians but despised by the Israelis.
Meanwhile, Israeli troops raided the Khan Younis refugee camp in southern Gaza in its second offensive in the past week to stop the mortar attacks.
The raid killed a Palestinian militant, according to Israeli and Palestinian officials. About 20 Palestinians demonstrated in the camp carrying Palestinian and British flags and demanding Mr Blair stop the demolitions. Israeli troops shot a second Palestinian in northern Gaza as he tried to cross over the fence separating Gaza from Israel.
Elsewhere, an Israeli civilian working on constructing the West Bank separation barrier was shot and killed by Palestinian militants, according to military officials.
The Al Aqsa Martyrs' Brigades, a militant group affiliated with Mr Abbas's Fatah movement, claimed responsibility.
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