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Israel will release 300 to 400 Palestinian prisoners before the Annapolis summit later this month as a good-will gesture to the Palestinian Authority and its chairman, Mahmoud Abbas.

But this number falls far short of the nearly 2,000 Abbas had requested from Prime Minister Ehud Olmert. The list will not include prisoners who were involved in killing Israelis, described as having "blood on their hands."

The release of the prisoners will be the only good-will gesture before Annapolis. Defense Minister Ehud Barak and the security chiefs are adamant in their opposition to lifting any roadblocks or checkpoints along roadways in the West Bank, fearing that this would undermine security and make it easier for terrorists to strike.

The U.S. has made it clear to Israel that while it recognizes its security needs, if Israel cannot dismantle roadblocks and lift restrictions on Palestinian freedom of movement, it must at least try to improve the way Palestinians are treated at checkpoints and shorten the waiting time.

After a delay at a checkpoint, the head of the Palestinian negotiating team, Ahmed Qureia, canceled a meeting with Foreign Minister Tzipi Livni in Jerusalem. (Full story, Page 2)

Livni apologized for the incident and asked the IDF to investigate.

Meanwhile, Olmert held a meeting yesterday to discuss the Annapolis summit and the negotiations toward a final-settlement agreement. Livni, Barak, the chief of staff and the heads of the intelligence services attended the meeting.

Olmert told the gathering that immediately at the start of negotiations following the summit, Israel will set a precondition that the Palestinians recognize Israel as "a Jewish state."

"I do not intend to compromise in any way over the issue of the Jewish state," Olmert said. "This will be a condition for our recognition of a Palestinian state."

Olmert said he raised the importance of this issue during his talks with European and American officials, and their response had been positive.

Olmert accepted the position of Livni and Barak, who demanded that the Palestinians recognize Israel "as a Jewish state."

This recognition is meant to bolster Israel's position that rejects the return of Palestinian refugees to areas inside the Green Line - the border before the Six-Day War in 1967.

During talks in recent weeks between the Israeli and Palestinian negotiating teams, the Palestinians refused to recognize Israel as a Jewish state in the shared declaration to be made at Annapolis.

Olmert's stance suggests that Israel does not intend to raise this issue as an obstacle to holding the summit, but intends to raise it after the conference.

Number of conditions

At the meeting with Olmert yesterday, Barak said Israel must insist on a number of conditions in the negotiations toward a final settlement.

Among these are a declaration that the conflict is over; that Israel is a Jewish state; that the Palestinian state is completely disarmed; that Israel has the right to overfly Palestinian territory; that the PA is also responsible for the Gaza Strip; that until there is a solution on the Gaza Strip, Israel will retain full freedom of action there; that a "safe passage" corridor between the West Bank and Gaza would go into effect only after the situation in Gaza changes; and that Israel will promise economic assistance to projects to be created in the territories with the help of foreign donors.

Meanwhile, and despite Palestinian claims that there is a crisis in the talks, Livni and Qureia exchanged drafts of the joint declaration that Israel and the Palestinians are to present at the Annapolis summit.

Government officials did not deny reports in recent days that Israel had surprisingly softened its stance on the core issues - particularly on borders and Jerusalem.

This morning the prime minister is scheduled to appear before the Knesset Foreign Affairs and Defense Committee to present the principles that will guide Israel in the negotiations with the Palestinians.