Foreign Minister Tzipi Livni confirmed Monday that she will travel to Cairo on Thursday to hold initial talks with her Egyptian and Jordanian counterparts about the recently revived Arab peace initiative.

The Arab League named Egypt and Jordan to a working group which would contact Israel over the initiative that offers it normal relations with the Arab world in return for a Palestinian state and full withdrawal from land captured by Israel in the 1967 Six-Day War.

"It's the first formal session," one Israeli official said.

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Political turmoil in Israel that threatens Prime Minister Ehud Olmert's government has delayed initial talks with the Arab League working group, diplomats involved in the matter said.

Livni last week called for Olmert to step down following the release of the Winograd report, which sharply criticized his handling of the Second Lebanon War, but that she would remain in the government for now.

Livni said Monday that the political crisis sparked by the Winograd report would not affect Israel's foreign policy.

"Of course there are challenges and difficulties in the Israeli government, But stagnation is not the best policy," she said.

A Foreign Ministry official said Livni's talks in Cairo would focus on the Arab initiative and "to see if it's possible to move forward."

The talks were scheduled before the release of the Lebanon war report a week ago.

Foreign Ministry spokesman Mark Regev declined to comment on the meetings, but said: "Moderate Arab leaders, of course they can't replace the Palestinians as partners in peace, but they can provide an atmosphere that is conducive to moderation."

Washington has been trying to promote the Arab League peace initiative in the hope it might bring states like Saudi Arabia, which do not recognise Israel, to deal publicly with the Jewish state and to help support Israeli-Palestinian talks.

Olmert and Palestinian Authority Chairman Mahmoud Abbas have agreed to meet bi-weekly, though the talks have largely been restricted to day-to-day issues.

The leaders are scheduled to meet next in the West Bank city of Jericho, but those talks have been postponed due to political uncertainties on the Israeli side, officials said.

First launched in 2002, the Arab initiative calls on Israel to withdraw from all land captured in 1967, to reach an "agreed, just" solution for Palestinian refugees and to accept a Palestinian state in the West Bank and Gaza Strip with East Jerusalem as its capital.

In return, Arab states would establish normal relations with Israel.