Israel will help Palestinian Authority Chairman Mahmoud Abbas "create a better environment" and return to peacemaking, Prime Minister Ehud Olmert said last night after meeting with U.S. Secretary of State Condoleezza Rice.

Rice said yesterday that the United States wants to help make practical improvements in the Palestinians' daily lives, as violence, deprivation and political chaos are reaching threatening levels in the PA.

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Rice is putting mild pressure on Israel to loosen what Palestinians claim is a blockade of the West Bank and Gaza Strip. These territories are not economically viable without extensive trade across their borders with both Israel and, for Gaza, Egypt, and without Palestinians being able to leave daily for jobs elsewhere.

Rice met Abbas in Ramallah yesterday and held talks on the crisis in the PA and how the U.S. could bolster the chairman's position.

Throughout her visit in the region this week, Rice has emphasized her intention to rally moderate elements in the Middle East, and Abbas, she said, is one of these.

"The Palestinians need a government that can provide for their needs and meet the conditions of the Quartet," she said, referring to the international community's conditions for recognizing the Palestinian government. These require the PA government to recognize Israel, relinquish violence and accept agreements previously signed by the PLO (Palestine Liberation Organization). Since its election to power in January, Hamas has refused to meet these conditions, and the PA has suffered a severe economic crisis as a result of the consequent international aid cutoff.

At a joint press conference in Ramallah with Abbas, Rice expressed her sorrow over the fact that much of the Palestinian population lacked basic supplies for the holiday month of Ramadan.

"I promised Chairman Abbas to double our efforts to improve the living conditions of Palestinians," she said.

Rice also promised to pass on to Olmert a Palestinian request that Israel resume transferring the taxes it collects on the PA's behalf - something it stopped doing following Hamas's election - open the border crossings and end settlement expansion.

The Rice visit was coolly received by Hamas leaders yesterday. PA Prime Minister Ismail Haniyeh said the secretary's visit was meant to serve Israel's interests and to "categorize the states of the region," a reference to the Bush administration's tendency to distinguish between moderates and extremists in the Middle East.

Meanwhile, Hamas yesterday rejected the two-week deadline posed by Abbas earlier this week for completing negotiations on an agreement for a national unity government.

Speaking with reporters in the Gaza Strip yesterday, Haniyeh said that "the talk of a time frame for the dialogue must be uprooted at the source."

Earlier, Abbas had said: "We will evaluate how to deal with the situation over the next two weeks." He was speaking during a press conference in Ramallah with the visiting foreign minister of Bahrain, Khalid al-Khalifa.

"There are no signs that the dialogue regarding the formation of a government of national unity will get back on track," Abbas added, hinting that he may make use of his authority under the Palestinian constitution to disband the current government, "at the right time."

Abbas yesterday reiterated his demand that any Palestinian unity government accept agreements signed by the PA and the PLO.

Among the options still being considered is the creation of a government of technocrats and independents affiliated neither with Hamas nor Fatah. Such a government would be able to accept the Quartet's conditions for recognition of the Palestinian government and economic assistance.