By Robert Berger
Jerusalem
23 December 2006

Israeli PM Ehud Olmert, right, Palestinian Authority President Mahmoud Abbas, at Olmert's official residence in Jerusalem, 23 Dec 2006

Israeli and Palestinian leaders have held a rare summit meeting. As Robert Berger reports from VOA's Jerusalem bureau, Israel made a number of concessions as a goodwill gesture.

Israeli Prime Minister Ehud Olmert embraced Palestinian President Mahmoud Abbas when he arrived in Jerusalem for their first summit meeting. The meeting, which was the first between Israeli and Palestinian leaders in a year-and-a-half, was aimed at giving a boost to the stalled peace process.

Mr. Olmert agreed to transfer $100 million in tax revenues to Mr. Abbas - money that Israel withheld from the ruling Islamic militant group Hamas. The prime minister also agreed to ease travel restrictions on Palestinians in the West Bank.

Israel wants to strengthen the moderate President Abbas, who is locked in an increasingly violent power struggle with Hamas. Fighting between Hamas and Mr. Abbas' Fatah faction has raised fears of a Palestinian civil war.

Hamas has been crippled by international sanctions because of its refusal to renounce violence and recognize Israel.

Israeli spokesman Mark Regev said Mr. Abbas has Israel's support because he condemns terrorism. "We see him as a partner, and we're hopeful that we can move forward with Abbas in a process of reconciliation," he said.

Mr. Abbas asked Mr. Olmert to free hundreds of Palestinian prisoners, but no agreement was reached. Palestinian officials say a prisoner release would help shore up support for Mr. Abbas on the Palestinian street, but Israel is reluctant to free people it says were involved in terrorism. A committee has been set up to discuss the issue further.

The two leaders also decided to meet again to build cooperation and trust.