In their first talks since formally restarting their peace negotiations at the Middle East conference in Annapolis late last month, the two leaders focused on how to make progress ahead of U.S. President George W. Bush's first visit to Israel and the West Bank next month.
Palestinian officials said Abbas and his negotiators were pushing for a halt to settlement expansion because they were making the ultimate goal of establishing a Palestinian state, with clear boundaries and east Jerusalem as its capital, an impossible task.
Both men vowed to try to reach a final peace deal before the Bush administration's term ends in January 2009, but two rounds of Palestinian-Israeli negotiations have hit brick walls due to Israel's announcement of expanding settlements on Palestinian territories.
Nevertheless, their meeting at Olmert's West Jerusalem residence was described as "positive" as they agreed to continue negotiating – but without an explicit Israeli agreement to stop settlement activity.
Palestinians saw a glimmer of hope in that both sides agreed not to take any steps that may pre-empt or prejudice the outcome of the final status negotiations, according to Palestinian and Israeli officials who spoke after the two leaders met.
It remained unclear what they promised to do, if anything, to avoid prejudicing the permanent status talks, which include the issues of Jerusalem, borders, settlements, water, refugees and security.
Palestinian officials said they relayed to the Israeli leadership their alarm from the creeping settlements across the territories that Israel occupied in 1967 and the speed in which they are "swallowing up" more land since the 1993 Oslo interim peace accords.
According to Palestinian research institutes, Israeli settlements in the West Bank and east Jerusalem grew dramatically since 1992. The number of settlers in the West Bank, excluding east Jerusalem, went up from 105,000 in 1992 to 280,000 today, while settlers in east Jerusalem increased from 153,000 to 185,000 in 2007.
Palestinians, backed by the Arabs, often complain of Israeli attempts to "create new geographic and demographic facts on the ground," including the "Judaization" of Jerusalem, to narrow prospects for a Palestinian state.
The Israeli government said this week it allocated $25 million from its 2008 budget to build some 750 new housing units in the settlements of Maale Adumim in the West Bank and Jebel Abu Ghneim, or Har Homa, in east Jerusalem. Israeli officials also indicated the construction of a massive new settlement of 10,000 to 15,000 flats on the outskirts of east Jerusalem in Qalandia, or Atarot.
Palestinian officials said that Abbas was to explain to Olmert the need to halt the settlement activities, not only because they encroach on the land where the Palestinian state is supposed to be set up and effectively pre-empt the final status discussions, but because they violate the first phase of the international peace Quartet's "road map" of 2003.
Chief Palestinian negotiator Ahmad Qorei, who attended the Abbas-Olmert meeting, said that "there will be measures taken on the ground to implement (Israeli) obligations under the road map."
However, Olmert was said to have insisted that settlement activities in east Jerusalem were legal because Israel annexed it shortly after its capture in 1967, although the international community does not recognize its annexation and considers it occupied territory.
A senior Israeli official said after the meeting the issues that stalled the negotiations were "defused." He told reporters that while Olmert again vowed not to build new settlements or appropriate more Palestinian land for the colonies, he "did not promise to freeze tenders" and that Israel will continue to build on vacant lots in existing settlements.
The Palestinians have in recent days lodged complaints to Washington and the three other Quartet members – the European Union, United Nations and Russia – about settlement expansion, demanding they pressure Israel to remove all the illegal outposts and to freeze settlement activities in line with the "road map."
Palestinians expect the Israelis to attempt to ease possible U.S. pressure on Tel Aviv by removing some of the 116 so-called "random outposts" that Jewish settlers erected after the introduction of the Quartet "road map," although there are no indications yet to do so.
Another issue that Abbas carried to Olmert Thursday was the Israeli prime minister's previous promises to ease restrictions on the movement of Palestinians in the West Bank by removing hundreds of military roadblocks in the West Bank.
Because Israel links these checkpoints to its security measures to protect itself from Palestinian "violence," it was unlikely to compromise its position. Israel has made no secret of making security being its top priority before peace, indicating the Palestinian Authority still needs to live up to its own obligations in the first stage of the "road map" by reining in militants.