Israel will act to allow Palestinians in the West Bank greater freedom of movement, Prime Minister Ehud Olmert Tuesday assured Tony Blair, the new international Middle East envoy. On Wednesday, the foreign ministers of Jordan and Egypt will visit Israel as representatives of the Arab League.

During a working dinner at the prime minister's residence in Jerusalem Tuesday night, Olmert told Blair that Israel will ease restrictions on the transportation of goods through its crossing points with the Palestinian Authority.

Diplomatic sources told Haaretz on Tuesday that in his meeting with Foreign Minister Tzipi Livni on Monday, Blair said he believed there was currently no point in having Israel negotiate a permanent agreement with the Palestinians. He said he wanted to focus on helping the Palestinian Authority establish its governmental institutions.

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From Jerusalem, Blair spoke of a "sense of possibility" in the region. But he indicated he needed more time before launching a mission aimed at enhancing peace prospects.

In his maiden visit to the region since being appointed by the international Quartet - the U.S., European Union, United Nations and Russia - the former British prime minister added: "Whether that sense of possibility can be translated into something ... needs to be worked out and thought about over time."

Blair also met with President Shimon Peres, informing him that he had come to the region primarily to "listen and learn."

Opposition leader Benjamin Netanyahu also met with Blair, and opted to concentrate on the Iranian nuclear weapons program. Blair agreed with Netanyahu that Iran's efforts to achieve nuclear capabilities constituted a threat to regional and world peace. Blair told Netanyahu he hoped progress in negotiations would help form a coalition of moderate forces against Iran.

Netanyahu also said he believed that Hamas, which controls the Gaza Strip, must be isolated to cause it to collapse.

After his meetings, Blair left for the Palestinian Authority, where he met with Chairman Mahmoud Abbas and Prime Minister Salam Fayad. Palestinian officials told the media that Blair's mandate "stemmed from the final goal of his mission," referring to the formation of a Palestinian state.

The officials were responding to statements by Israeli officials who said earlier this week that Blair's mission pertains mainly to issues such as humanitarian aid for the Palestinians. Blair is due to leave Thursday morning.

Egyptian Foreign Minister Ahmed Aboul Gheit and his Jordanian counterpart, Abdelelah Al-Khatib, will arrive Wednesday in Israel to promote the Arab peace initiative between Israel and the Palestinians.

The two diplomats will be making their first visit to Israel in their capacity as representatives of the Arab League.

They are expected to try to promote the Arab initiative calling for an Israeli withdrawal from all territories occupied since 1967, a solution to the Palestinian refugee problem, and the establishment of a sovereign and independent Palestinian state.

Al-Khatib and Aboul Gheit are slated to address the Knesset's Foreign Affairs and Defense Committee.