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Prime Minister Ehud Olmert said Monday that he would seek cabinet approval for the release of 250 Fatah prisoners held in Israeli jails, as part of a package of steps aimed at strengthening Palestinian Authority Chairman Mahmoud Abbas.

Speaking at the close of a four-way summit with Abbas, Egyptian President Hosni Mubarak and Jordan's King Abdullah II, Olmert said only prisoners who Israel does not hold directly responsible for deaths of its citizens would be released.

"As a gesture of goodwill toward the Palestinians, I will bring before the Israeli cabinet at its next meeting a proposal to free 250 Fatah prisoners who do not have blood on their hands, after they sign a commitment not to return to violence," Olmert said.

The prime minister had previously ruled out freeing Palestinian prisoners as long as Israel Defense Forces corporal Gilad Shalit remains in captivity in the Gaza Strip. Shalit's captors on Monday released an audio recording of the captive soldier speaking, to coincide with the date of his abduction a year ago.

The prime minister did not, however, announce that Israel would remove West Bank checkpoints. That step was halted due to IDF objections.

Olmert told Mubarak during their face-to-face meeting at the summit that Israel is also willing to help strengthen the Palestinian security forces loyal to Abbas. He called on the Egyptian president to increase his efforts to prevent arms smuggling into the Gaza Strip.

"In these tumultuous times, I also see a chance," the prime minister said as the talks ended. "An opportunity has emerged to genuinely advance the regional diplomatic process. I do not intend to let this opportunity pass us by."

Olmert said Israel would recognize the new emergency Palestinian government headed by independent Salam Fayad, and would work with it to advance the peace process as well as the U.S.-backed road map for peace.

According to the prime minister, Israel will take steps to ensure that West Bank residents get the sense that choosing the path of peace will open new doors. Olmert added that he agreed to Abbas' request to continue humanitarian aid to the Gaza Strip.

"We are not interested in punishing the population solely because they are ruled by a terrorist organization," said the prime minister, referring to Hamas' takeover of the Gaza Strip. "We cannot and will not cooperate with those forces."

Addressing the Palestinian people, Olmert said, "We are not indifferent to your suffering. We are not ignoring the need to bring it to an end, through understanding and peacemaking."

"As Israel's prime minister, I say to you: We have no desire to rule you... nor run your lives.

"We have no intention to make decisions for you. I believe that soon you will be able to live in your state alongside the State of Israel."

Turning to the families of Palestinian prisoners, Olmert said: "Just as it is important to you to bring your sons home, it is also important to us. The terrorist organizations holding our soldiers are showing cruelty and inhumanity."

The prime minister said that in releasing the audio tape purportedly from Shalit, the "terrorist organizations are trying to emotionally manipulate the Israeli public. This won't work."

Olmert called on Arab states to negotiate on the Arab peace initiative reaffirmed by the Arab League earlier this year. "Let's talk about it," said Olmert. "Give the Israeli and Palestinian people your support and backing."

Abbas appealed to Olmert during their meetng Monday to resume serious talks on the estblishment of a future Palestinian state.

"Our region stands at a crossroads between the paths of peace and violence," said Abbas.

"The decisions of this summit must give hope to the [both] peoples and begin a peace process toward a better future," he added.

Saeb Erekat, a senior Abbas aide, said following the summit that "now the time has come to turn words into actions on the ground."

Erekat said that Olmert and Abbas had agreed to establish a joint committee to discuss an Israeli withdrawal to the lines that existed prior to the outbreak of the intifada in September 2000.

The committee would also discuss a solution to the issue of Fatah activists who were expelled from the West Bank to the Gaza Strip following the standoff at Bethlehem's Church of the Nativity, and who are currently still in the Gaza Strip.

Abbas also asked Olmert to allow Palestinians who are stranded in Egypt to enter the Gaza Strip, and demanded that Israel halt all West Bank construction.

Mubarak: Preserve territorial unity

"We are demonstrating at this summit our support for the PA and Abbas and the legitimacy of his rule," said Mubarak. "We are calling for the territorial unity of the West Bank and Gaza Strip to be preserved."

"There is an urgent need to end the internal Palestinian clashes and restore dialogue," continued Mubarak.

The Egyptian president said during his meeting with Olmert that everything must be done in order to ensure that humanitarian aid reach the Gaza Strip. "We will not let any Palestinian starve in Gaza," he said.

"We must stabilize the situation," added Mubarak. "The road map has been faltering for seven years and we must start discussing a diplomatic horizon along with the removal of checkpoints and the easing of Palestinian suffering."

King Abdullah said in his address that "the path of peace is clear and so is the path of violence. We want a better future for our children. We have an opportunity to realize the dream that we have been awaiting for many years."