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Middle East leaders set aside construction dispute

Israeli and Palestinian leaders decided to downplay a dispute over construction in Jerusalem and begin negotiations on larger issues, clearing the way for US President George W. Bush to try his hand at significant peacemaking next month.

The two-hour meeting on Thursday between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas was the first since they declared a resumption of peace negotiations last month at Bush's Middle East peace conference in Annapolis, Maryland. Bush is due to visit in two weeks.

"Beginning next week, final status negotiations will be resumed," said Ahmed Qureia, the lead Palestinian negotiator, referring to key issues like final borders, Palestinian refugees and Jerusalem holy sites, which have stymied peace efforts for years.

Alongside the talks, violence continued in the Gaza area. Late on Thursday, Israeli aircraft killed Mohammed Abdala, a senior Islamic Jihad commander, the militant group said. He was the third senior Islamic Jihad militant killed in the last two weeks.

At Annapolis, Abbas and Olmert set a target of next year for a final peace agreement. But attempts to begin negotiations foundered over an Israeli plan to build more than 300 new homes for Jews in east Jerusalem. About 180,000 Israelis live in east Jerusalem neighborhoods built over the past four decades.

The Palestinians claim east Jerusalem as their future capital. Until Thursday, they had insisted on peace negotiations cap on building.

In addition to Israeli pledges to halt settlement activity, the peace plan requires the Palestinians to dismantle militant groups that target Israelis.

Efforts to bring Israel and the Palestinians back to the negotiating table gained traction after Islamic Hamas militants seized control of the Gaza Strip in June. Abbas, a moderate, expelled Hamas from government after the takeover, freeing him to conclude a peace agreement. Hamas is not party to the talks.
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