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Prime Minister Ehud Olmert agreed Monday to resume open-ended, face-to-face talks with Palestinian Authority Chairman Mahmoud Abbas in a possible step toward restarting substantive peace talks, a U.S. official said.

Olmert met with U.S. Secretary of State Condoleezza Rice for the second time in as many days late Monday evening.

Olmert and Abbas will initially hold low-key confidence-building sessions, the official said. Israel has refused substantive talks since Abbas joined Hamas militants in a coalition government this month.

The talks between the Palestinian and Israeli leaders will be open to all issues, said the U.S. official, speaking on condition of anonymity ahead of a planned press conference by Rice on Tuesday.

Olmert's agreement to new talks was a small step, since he had held such sessions with Abbas before the Hamas deal, but it still was seen as a sign of fresh and surprising progress toward peace talks.

When Abbas and Hamas formed their coalition government last week, Olmert said he would talk about humanitarian and other concerns if need be, but he ruled out more detailed discussions or negotiations.

Rice said Monday that she has no intention of taking over the negotiations between Israel and the Palestinians, saying Washington is helping the sides examine political issues as well as issues related to daily life.

"I don't intend by any means to take control of the Israeli-Palestinian bilateral dialogue," said Rice. "I think it is very important."

Rice made the comments following a meeting with Foreign Minister Tzipi Livni in Jerusalem.

On Sunday, Rice said that the U.S. is planning to hold separate talks with Israel and the PA aimed at achieving an accord that will lead to the establishment of a Palestinian state.

The secretary of state will hold a press conference Tuesday morning in which she will make a statement summarizing her two-day visit to Israel and the Palestinian Authority.

The press conference was to be held Monday evening, but was delayed by Rice earlier in the day. Rice is expected to announce the beginning of talks on the creation of a Palestinian state.

The secretary of state will then depart for Saudi Arabia ahead of the Arab League summit in Riyadh, in which Arab leaders are expected to re-launch the 2002 Saudi peace initiative.

Olmert, however, said Monday that he is not familiar with any new suggestions for negotiations with the Palestinians.

Speaking at a joint press conference with United Nations Secretary General Ban Ki-moon in Jerusalem, Olmert said that he maintains ongoing contact with Palestinian Authority Chairman Mahmoud Abbas, and that the basis for any new negotiations would be the road map.

Olmert said he would continue his contacts with Palestinian Authority Chairman Mahmoud Abbas without interruption, but said he had no plans for a major Mideast summit.

"I want to remind you that there is constant contact between the Palestinian president and me, and this will continue without interruption in the future," the prime minister said. However, he denied press reports that a major summit is in the works.

Ban: I have a better appreciation for Israel's security concerns

UN Secretary-General Ban Ki-moon toured Israel from the air on Monday, winding up his first visit since taking office.

The Israel Defense Forces took Ban on a helicopter ride around Israel and the West Bank, in an effort to give him a feel for the close quarters and security challenges.

"Having gone through some parts of Israel by helicopter today, I came to better appreciate the security concerns facing Israel," he said. "At the same time I am deeply troubled by the network of checkpoints, growth of settlements and the barrier where it appears on Palestinian lands."

At a news conference on Monday, Ban urged Israel and the Palestinians to resume peace negotiations, calling Palestinian Authority Chairman Mahmoud Abbas a genuine partner for peace.

He said that in his talks in the West Bank, "I impressed upon the Palestinian leadership the vital importance of tackling the security situation, ending violence in all its dimensions and, above all, securing the early release of an Israeli soldier captured by Hamas-linked militants in June."

Ban was hopeful about prospects for peace between Israel and the Palestinians. "I believe we can and must make progress in the coming days and months," he said.

Ban has internal consultations scheduled for Tuesday morning before leaving.

Rice: U.S. to hold separate talks with Israel, PA

Rice said Sunday night that the U.S. will hold separate negotiations with the two sides, present questions and request clarifications regarding their positions, in an effort to reach an agreed-upon agenda for the renewal of peace talks.

Rice is planning to present the two sides with questions on two main issues: territory and security.

According to Rice, it is possible to learn from the experience that has accumulated since the end of negotiations in 2000, particularly with regard to security arrangements. She pointed to the management of the border crossings at Karni and Rafah in the Gaza Strip as examples that should be studied closely.

The secretary of state also said that she intends to request clarifications from Israel as to how it intends to implement the vision of a territorially contiguous Palestinian state in the West Bank.

Rice arrived in Israel on Sunday and dined with Olmert at his home in Jerusalem. Earlier she visited Ramallah and met with Abbas, whom she met again Monday morning in Jordan.

Speaking to U.S. reporters before dining with Olmert, Rice acknowledged her approach was cautious and said the chances for quick dramatic progress were low.

"My approach has been, I admit, careful. It's been step by step. I have not been willing to try for the big bang. I don't think that that's where we are," she said.

"The question here isn't speed. The question is trying to really move forward toward the establishment of a Palestinian state."

Her meeting with Olmert lasted approximately three hours, Israel Radio reported. Rice is scheduled to meet Monday with Defense Minister Amir Peretz and Foreign Minister Tzipi Livni.

The Israeli political team held talks with Rice's aides Sunday in an effort to soften the statement.

Israel would like to avoid formulations that will be binding in a final agreement or which deal with issues of serious dispute (most likely, Jerusalem and the refugees).

Rice told reporters Sunday that her earlier visit to the region, five weeks ago, and her tripartite meeting with Abbas and Olmert in Jerusalem took place with the Mecca agreement for the establishment of a Palestinian national unity government as the background.

Unlike that meeting, which Rice hinted had taken place because it had already been scheduled, this visit aims to jump-start a separate negotiation process.

Rice said that she sat for many hours with U.S. President George W. Bush in order to formulate a diplomatic strategy, and that she does not exclude the possibility that a special envoy will be appointed for talks with the two sides.

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