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Prime Minister Ehud Olmert met yesterday with Palestinian Authority Chairman Mahmoud Abbas at the Israeli premier's official Jerusalem residence. The two leaders held an hour-long meeting with aides present, and then discussed the "political horizon" and the two-state solution on their own for another hour.

Abbas was accompanied by Rafiq Husseini and Saeb Erekat.

During the meeting the Palestinians proposed restarting negotiations toward a final settlement, and offered to discussed the "core issues" - Jerusalem, the refugee question and borders. Olmert rejected their proposal, saying it is too soon to discuss these issues and insisted that there are other important issues that must be dealt with first.

However, the Palestinian delegation said it has been decided that from now on Abbas would only deal with final status issues and not with routine matters, such as the separation fence, fugitives, immunity to militants and aid, which will now be handled by Prime Minister Salam Fayad and his interior minister. In so doing, the PA has essentially imposed an agenda for future meetings between Olmert and Abbas.

During the meeting where aides were present, Olmert warned Abbas against renewing political cooperation with Hamas.

"Any renewed cooperation between Fatah and Hamas will be, from our point of view, a breakdown of the political process," Olmert said.

Abbas vowed not to resume any such cooperation, a political source said yesterday.

During the meeting the two leaders and their aides went over a list of promises made by Olmert during the Sharm el-Sheikh summit three weeks ago, which a political source described as having been "completely fulfilled."

Olmert officially informed Abbas that 250 Palestinian prisoners, most of whom are members of Fatah, would be released following approval by the special ministerial committee headed by the prime minister himself.

The prisoners will be released on Friday in the West Bank, barring any legal delays.

Among those being released are 11 minors and one or two elderly prisoners in prison for 15 years. None of the prisoners being released was involved in the murder of Israelis, a political source said.

"There is no Israeli citizen that can claim he was harmed by one of them [the prisoners]," the political source added.

"However, most of them were involved in attempts to carry out terrorist attacks that failed."

Referring to the immunity granted by Israel to 178 Fatah-affiliated militants, Abbas said that about 100 have already signed the agreement in which they promise to refrain from terrorism and surrender their arms to the Palestinian Authority.

The Palestinian leader made a number of security-related requests, including the transfer of a shipment of arms from Jordan to the PA's security forces.

The prime minister also promised to consider allowing the transfer of the Badr Brigade - a PLO force in the Jordanian armed forces - to the West Bank in order to bolster the PA's security forces.

Olmert told Abbas that he agreed to allow veteran leaders of the PLO to enter the West Bank for a few days in order to participate in a political conference that is meant to bolster the legitimacy of the government of Prime Minister Salam Fayad.

The Palestinian chairman asked Olmert to transfer humanitarian aid to Hamas-controlled Gaza Strip, and the prime minister promised that Israel would continue to allow the transfer of aid. The aid transfers would be coordinated with the various international aid organizations operating in the Strip, and would pass through the Kerem Shalom and Karni crossings, which will be reopenned.

Abbas also asked Olmert to allow for greater transfer of goods from the Jordan Valley into other parts of the West Bank in order to help stimulate the Palestinian economy.

The two leader confirmed plans to meet again in two weeks.

Olmert expressed his hope to visit Jericho for the next meeting per original plans, which were postponed following Hamas' takeover of the Gaza Strip. The prime minister told his Palestinian guests that his motivation partly stemmed from "the good things I heard about the cooking of Mrs. Erekat."