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Israel is prepared to meet with the Arab League's committee for furthering the Saudi peace initiative, government sources in Jerusalem said yesterday. The sources said Israel was waiting for the official appointment of the committee next week. "If its goal is to further the Saudi initiative, then from our point of view, it is possible to engage in dialogue with it," a source said.

American officials, including U.S. Ambassador to Israel Dick Jones, have said recently that the expected dialogue between the Arab League and Israel would be a move of historic significance.

Arab League Secretary-General Amr Moussa and representatives of the 11 Arab member states will meet on Wednesday to move the peace initiative forward. The plan was reaffirmed at the Riyadh summit last month.

After the special committee is established, the Arab League will seek to engage in talks with the five permanent members of the United Nations Security Council, the Quartet and other international organizations, in order to further the initiative.

Foreign Minister Tzipi Livni will meet this evening on the Jordanian side of the Dead Sea with her Jordanian counterpart, Abdelelah Al-Khatib. The two will discuss the appointment of the committee, which will include Jordan and Palestinians who maintain relations with Israel.

Egyptian Foreign Minister Ahmed Aboul Gheit discussed the matter in a phone call to Livni before Passover.

Prime Minister Ehud Olmert will meet today at his residence in Jerusalem with Palestinian Authority Chairman Mahmoud Abbas. They will discuss for the first time "an outline of a diplomatic horizon" that Israel will propose to the Palestinians. Olmert invited Livni and Defense Minister Amir Peretz to take part in the meeting.

Under pressure from U.S. Secretary of State Condoleezza Rice, Olmert agreed to discuss final status issues and future relations between Israel and a Palestinian state with Abbas. However, a source close to Abbas said the Palestinian side believes that as far as Olmert is concerned, the meeting is mainly intended to give Rice the impression of assisting Abbas. "We are coming with particularly low expectations," the source said.

Olmert still refuses to discuss the "core issues": refugees, 1967 borders and Jerusalem. He is only prepared to speak to Abbas about issues that do not require strategic concessions on Israel's part, government sources said; namely, security and economic arrangements between Israel and the future Palestinian state.

Olmert is also expected during the meeting to reiterate Israel's security demands: the release of the kidnapped soldier Gilad Shalit, a stop to Qassam fire from the Gaza Strip and ending weapons smuggling from Sinai to Gaza.

Olmert and Abbas will also discuss improving conditions for the Palestinians in the territories, movement through the crossings at Gaza and the removal of roadblocks in the West Bank.

Palestinian sources said that as of yesterday at midnight, the meeting's agenda had not been set. "Each side will present what it wants to. The PA will seek again to discuss the core issues of the final status and Palestinian funds held by Israel, while Israel will focus the discussion on the release of the kidnapped soldier Gilad Shalit."

A Hamas spokesman in the Gaza Strip, Fawzi Barhum, said yesterday that there was no point to meetings with Israel.

Government sources said yesterday that Olmert views himself as the leader of a diplomatic initiative that began with his speech at Sde Boker in November 2006, and continued with the re-ratification of the Saudi initiative in Riyadh. "Israel and the prime minister object to the content of the initiative because it mentions the return of Palestinian refugees, but see the fact that the Arab summit discussed peace with Israel as positive," the source said.