Foreign Minister Tzipi Livni told her French counterpart Bernard Kouchner that she opposes the agreement in principle that outgoing prime minister Ehud Olmert has offered Palestinian Authority President Mahmoud Abbas.

"I do not believe in far-reaching proposals and an attempt to expedite matters, especially in light of the political situation," Livni, the prime minister-designate, told Kouchner on Sunday.

In the morning, Kouchner met with Olmert, who said he was frustrated that Abbas had not accepted his proposal. "You've read what I said in the interview," Olmert told Kouchner, referring to his statements in Yedioth Ahronoth favoring Israeli withdrawal from East Jerusalem and the Golan Heights. "Still, the Palestinians do not want to sign."

Kouchner raised the matter later when he met with Livni and asked why she objects to Olmert's proposal. Olmert's plan proposes a comprehensive solution on borders and refugees and postpones a decision on Jerusalem.

Livni's explanation was a criticism of Olmert. "Abu Mazen [Abbas] in his present political situation cannot accept such an agreement," she said. "The political situation in Israel also does not allow it to be signed."

Livni also argued that blaming the Palestinians for refusing to accept Olmert's offer does no good. "We can say this is their fault - but what will that do?" she said. "We had the same thing after Camp David in 2000 and look where that got us."

Livni: Annapolis will continue, regardless of political upheaval

Earlier Sunday, in her first foreign policy address since winning the Kadima party primary last month, Livni voiced her commitment to continue peace negotiations with the Palestinians.

"Annapolis will continue," Livni said, referring to a U.S.-sponsored peace conference last November that restarted negotiations on the establishment of a Palestinian state.

"Let us not allow dates or political changes to stand in our way," she said, in her address to Foreign Ministry conference on policy and strategy in Jerusalem.

"The point is to understand the required concessions in order to conduct a correct process," Livni said.

Sunday's conference marked the first of what is to be annual assessments of Israel's foreign policy, and was also attended by Palestinian Foreign Minister Riyad al-Malki.

Israeli and Palestinian leaders have expressed doubts they could meet Washington's goal of reaching a peace deal by the end of the year, before U.S. President George W. Bush leaves office.

"We see that the next months are maintaining a level of uncertainty and that level of uncertainty is getting higher and higher," Malki said in his English-language address to the forum in Jerusalem.

"We are waiting to see who will be the next president, (Barack) Obama versus [John] McCain, and believe me there is a big difference between the two vis a vis the situation in the Middle East ... the Middle East peace process and the Israeli-Palestinian conflict," Malki said.

He did not elaborate on the Palestinian view of the Democratic and Republican presidential candidates.

Livni was asked by President Shimon Peres on September 22 to form a government in 42 days following Olmert's resignation, under a cloud of corruption allegations.

"We hope that [Livni] will succeed [in forming a new government] because this will also show continuity and commitment to the peace process and to the negotiations [for] a Palestinian state," Malki said.

Commenting on a key issue that has blocked progress in Israeli-Palestinian peace negotations, Malki described Israel's settlement activity in the West Bank as a "timebomb."

But he said the Palestinian Authority remained committed to the talks as a "strategic choice" and to pursuing an "internal dialogue" to reconcile with Hamas Islamists who seized control of the Gaza Strip in June 2007.

Because of the sensitive coalition negotiations with Shas, Livni will avoid making any declarations about Jerusalem or future concessions to the Palestinians.

The main goal of Livni and Foreign Ministry Director General Aaron Abramovich at the conference is to advance their quest to raise the status of the ministry vis-a-vis Military Intelligence, the Shin Bet security service, the Mossad and the Defense Ministry with regard to making military and foreign policy decisions. Senior Foreign Ministry officials said the idea was to end the military establishment's near monopoly on drafting recommendations for the cabinet and the security cabinet.

In attendence at the conference's opening session were past and present foreign ministers including France's Foreign Minister Bernard Kouchner and former German foreign minister Joschka Fischer.

Also in attendence were the Director General of Sinapore's Foreign Ministry, the new U.S. Ambassador to Israel James Cunningham, members of the Knesset's Foreign Affairs and Defense Committee and 13 senior Israeli ambassadors serving abroad.

The three-day conference is the culmination of three months of work in the Foreign Ministry to prepare the first annual foreign policy assessment. The goal is to hammer out an assessment similar in style to those produced by the ministry's counterparts in Britain, France and the United States.

After the conference sessions, a written foreign policy assessment will be assembled and its recommendations will be submitted to the security cabinet for approval. The recommendations are to become part of the Foreign Ministry's agenda and are expected to affect staffing at Israel's diplomatic representations abroad.