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Prime Minister Ehud Olmert intends to release more Palestinian prisoners as a gesture of good will to the Palestinian Authority prior to the Annapolis summit. The prime minister is currently examining a request by the PA for freeing as many as 2,000 prisoners, according to sources in his bureau, but no decision has yet been made on the final number or the timing of the release.

Also yesterday, during meetings with visiting U.S. Secretary of State Condoleezza Rice, Israeli officials said that any deal that will lead to the establishment of a Palestinian state would first have to assure Israel's security.

The secretary of state had a working lunch with Olmert, and a source in the Prime Minister's Bureau said that Rice had agreed to most of Israel's conditions regarding the Annapolis summit. The official said they spoke about the upcoming summit and "adhering to the principles of the road map as a basis for progress between Israel and the Palestinians."

Olmert has insisted that the joint declaration at Annapolis will not refer to the "core issues," nor to a fixed timetable for a solution to them. However, later yesterday, the prime minister did say that negotiations with the Palestinians after the summit will focus on the core issues.

"All the fundamental questions, the substantive issues, all the historical questions burdening our debate - are on the agenda," Olmert said during an address at the Saban Forum, an annual gathering of Israeli and U.S. political leaders.

Discussing the possibility of an additional release of Palestinians held in Israeli prisons, a political source in Jerusalem said yesterday that "because at Annapolis there will be no solutions presented to the core issues, the Palestinians want to show that they are making gains in routine matters - both in the implementation of the road map and in the release of prisoners."

The reference to the core issues, among the main bones of contention between the two sides, concerns the questions of refugees, Jerusalem and borders.

"From our point of view, the release of prisoners is the easiest price to pay, but there are still no numbers," the same source clarified.

In recent months Israel has twice freed Palestinian prisoners, as a gesture of good will meant to bolster the position of PA Chairman Mahmoud Abbas. A total of 250 prisoners were released on the eve of the summit at Sharm el-Sheikh in June, and 90 more in September, for the holy month of Ramadan.

The last release of prisoners was opposed by Shas and Yisrael Beitenu coalition partners, as well as by Minister of Transport Shaul Mofaz of the prime minister's party, Kadima.

Unlike other moves that directly affect the quality of life of Palestinian civilians, a decision to free prisoners is less dependent on agreement by the defense minister and defense establishment, in general. In deciding on such a release, Olmert can rely on the support of his Labor coalition partners and the majority of his Kadima colleagues.

Meanwhile, Defense Minister Ehud Barak told Rice during their meeting in Jerusalem yesterday that the sanctions Israel has imposed on the Gaza Strip will not lead to a humanitarian crisis.

He also promised to allow Palestinian policemen to deploy to other cities in the West Bank, if the deployment of 300 PA policemen in Nablus, which was carried out on Friday, proves to have a positive effect.

Rice also met Foreign Minister Tzipi Livni yesterday, who told reporters afterward that the Palestinians "need to understand that the implementation of future understandings will be implemented only according to the phases of the road map - meaning security for Israel first and then the establishment of a Palestinian state."

PA Chairman Mahmoud Abbas, who will see Rice today, said in a speech in Ramallah that Palestinians had abided by 90 percent of the road map requirements and now "Israel must do its part."

Livni, who heads Israel's negotiating team preparing for the Annapolis summit, said that Israel was prepared to move forward in discussions with the Palestinians, although the situation was "complicated ... more than ever."

Rice told Livni she hoped her visit here would help to "advance the work you are doing bilaterally with the Palestinians as well as continuing to plan for the Annapolis meetings."

Also yesterday, Quartet envoy and former British prime minister Tony Blair said he hoped to announce a series of projects soon that will help bolster the Palestinian economy. He told a conference in Jerusalem that formal negotiations over creating a Palestinian state should not be "impossibly difficult." But he acknowledged that the path was "utterly fraught" and that both sides had to take steps to build confidence.