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Palestinian Authority Chairman Mahmoud Abbas on Thursday said he hopes to hold a long-awaited summit with Prime Minister Ehud Olmert by the end of the year.

Abbas spoke at a news conference with the visiting Italian foreign minister, Massimo D'Alema.

"We always showed our willingness to hold this meeting with Olmert, and it's no secret that we hope it will take place before the end of this year," Abbas said at a news conference with visiting Italian Foreign Minister Massimo D'Alema. "There is progress in preparations for this meeting."

The two men have expressed readiness to hold their first summit for months. But preparations have bogged down over disagreements over the agenda.

Abbas has said he wants Israel to promise to release hundreds of Palestinian prisoners. Olmert has ruled out a prisoner release until Hamas-linked militants free Israel Defense Forces soldier Gilad Shalit, captured last June.

Senior PLO negotiator Saeb Erekat confirmed earlier this week that efforts were being made to set up a meeting between the two leaders.

"Preparations are being made, and the moment these are completed, the meeting will take place," Erekat said Tuesday.

A Palestinian source told Haaretz that a possible date for the meeting is December 24 or 25, and at the latest, January 1 or 2.

According to the source, the two leaders would like to hold the meeting before U.S. Secretary of State Condoleezza Rice arrives to the region in early January.

The visit to Ramallah of Olmert's senior policy adviser, Shalom Turjeman and Olmert's chief of staff Yoram Turbowicz last week, the Palestinian source said, was interpreted among Abbas' aides as a sign of goodwill that will bring about closer ties between the staff of the two leaders.

The release of Palestinian prisoners prior to a deal for Shalit's release will prove that Israel is willing to initiate action, even when it does not come under military pressure, the Palestinian source said.