Prime Minister Ehud Olmert will not meet with Palestinian Authority Chairman Mahmoud Abbas on Thursday, at the Palestinians' request, an official in the Prime Minister's Office said Wednesday.

Chief Palestinian negotiator and Abbas confidant Saeb Erekat said the two sides were in disagreement over the Palestinians' request that Israel release withheld Palestinian taxes.

Palestinian officials said that Israel was also unwilling to accept a Palestinian demand to agree to revive the cease-fire in the Gaza Strip on condition that it is extended to the West Bank.

	Advertisement

"The meeting tomorrow (Thursday) between Prime Minister Olmert and Chairman Abbas has been postponed as per the Palestinians' request," Olmert's office said in a statement.

An official in Olmert's bureau said no new date had been set for the summit.

Abbas aide Nabil Abu Rdainah said: "There is a need to reach an agreement on some issues before convening the meeting."

Olmert and Abbas last met on April 15 as part of a U.S.-initiated series of talks envisaging a meeting every two weeks.

A Palestinian official said Israel has to understand "Abbas is also under intense of pressure... It is unrealistic that Abu Mazen [Abbas] push for the Palestinian factions to cease Qassam rocket fire, and for Israel to give nothing in return."

Government officials, however, slammed the demand for a cessation of IDF activities in the West Bank as something that would almost immediately lead to Palestinians carrying out terror attacks in Jerusalem and Tel Aviv.

Israel is considering returning up to half of the tax revenues it has been withholding from the Palestinians as part of a United States-led effort to bolster Palestinian Authority Chairman Mahmoud Abbas, Israeli sources said Tuesday.

Israel could transfer as much as $300 million to $400 million in phases, through a mechanism that would guarantee none of the money would be handled by the Hamas-led government or militants, the sources said.

Israel started withholding the tax revenues, which it collects on the Palestinian Authority's behalf, after Hamas Islamists defeated Abbas's secular Fatah faction in parliamentary elections in January 2006.