Israel has agreed to resume face-to-face talks with a moderate, Western-backed Palestinian leader who is sharing power with Islamic Hamas militants, a US official said.
However, Israeli Prime Minister Ehud Olmert rules out talking about key components of a future peace deal, such as Jerusalem, the borders of a Palestinian state and the fate of Palestinian refugees, an Israeli government official said.
Yesterday, Israel welcomed the idea of a regional peace summit, although no such meeting is set, and Saudi Arabia suggested it would consider changes in a dormant peace initiative that could make it more acceptable to Israel.
The new developments came at a time of high-profile diplomacy, with US Secretary of State Condoleezza Rice and United Nations Secretary-General Ban Ki-Moon both in the region for talks with Israeli and Arab leaders.
Rice has been trying to revive peace talks between Israel and the Palestinians, with help from Arab neighbours.
The odds were long even before the latest complication posed by Hamas, a political and military organisation that Israel, the United States and the European Union count.