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Prime Minister Ehud Olmert and Palestinian Authority Chairman Mahmoud Abbas will meet in two weeks, their third meeting since the resumption of top-level diplomatic contacts. They will concentrate on ways of "furthering the dialogue" in view of the difficulties in forging a Palestinian unity government, a senior political source in Jerusalem said yesterday.

Earlier this week, aides for the two leaders met for a frank discussion to prepare for the Olmert-Abbas meeting.

In Cairo on Tuesday, Abbas said he would meet Olmert in "a week or two."

Olmert reiterated yesterday during his meeting with the visiting European Union commissioner for foreign affairs, Benita Ferrero-Waldner, the preconditions for proceeding further with diplomatic talks with the Palestinians.

"My talks with the Palestinian President will deal with issues relating to containing terrorism and the quality of life of the Palestinians," he said.

Olmert is unwilling to discuss the issue of a final settlement or the implementation of the second stage of the road map.

As an example of the improvements in the quality of life of the Palestinians, Olmert told the visiting EU official of his decision last week to extend the daily operating hours for the Karni crossing for goods in and out of the Gaza Strip.

"This way the crossing can handle more than 800 trucks per day," he said.

Ferrero-Waldner said yesterday that there is no discord within the Quartet on its demands of the Palestinian unity government, despite recent signs of divisions.

The United States, EU, Russia and United Nations make up the Quartet, which has said the Palestinians must renounce violence, recognize Israel and accept past agreements.

The new power-sharing deal between the rival Fatah and Hamas movements, reached in Saudi Arabia earlier this month, only pledges to respect past peace deals, falling short of the international conditions.

Palestinian Authority Chairman Mahmoud Abbas of Fatah says the deal is the best he can get from Hamas.

While the U.S. and EU have reacted with skepticism, Russia has been more positive about the power-sharing deal.

Ferrero-Waldner, who met with Palestinian officials yesterday, said the new government needs to respond to the Quartet principles.

However, in talks with Palestinian and Israeli officials, Ferrero-Waldner has made clear the EU is not likely to pull the plug on an emergency aid program that provides relief for some 900,000 Palestinians.

"We have never abandoned the Palestinian people," said Ferrero-Waldner. She made clear the EU would not do so in the foreseeable future.

Ferrero described continued assistance to the Palestinians as a way to keep the situation somewhat under control. She said the EU was keen to engage the Palestinians by launching good governance and other programs.

Meanwhile, Secretary of State Condoleeza Rice is due to visit the region in late March to try to expand the "political horizon" and help shape a future Palestinian state. It is not expected that she will hold a tripartite meeting with Olmert and Abbas.