Israeli Prime Minister Ehud Olmert appeared optimistic yesterday towards reaching an agreement with the Palestinians regarding borders of a future Palestinian state, considering the issue of borders the simplest among the other two main issues of the status of Jerusalem and the issues surrounding Palestinian refugees.

Olmert was speaking to reporters on Tuesday following a three-day official visit to Berlin, in which he met with Angela Merkel, the German chancellor.

However, Olmert dismissed the possibility of reaching an overall agreement with the Palestinians by the end of 2008, as envisioned by U.S President George W. Bush during last November's Washington-sponsored Annapolis peace summit.

The Israeli PM hinted that both the Israelis and Palestinians agreed to delay talk on the issues of Jerusalem and the problem of Palestinian refugees.

Israeli foreign minister, Tzipi Livni, this week dismissed the possibility of realizing President Bush's vision of a two-state solution, "as long as the Islamist Hamas movement in Gaza remains in power".
Chancellor Merkel has expressed understanding for the Israeli actions taken against Gaza, yet she voiced concern over the humanitarian situation there.

In the meantime, top Palestinian negotiator, Ahmad Qurai, slammed planned Israeli settlement activities in occupied East Jerusalem.

"As all parties concerned look forward to observing genuine negotiations that would lead to a just, lasting peace in the region, the declaration of plans to construct settlements in Jerusalem is a war declaration", Qurai was quoted as saying.

Qurai called on Washington and other international players to intervene to halt such settlement projects on occupied Palestinian land, warning of "the grave consequences of such Israeli policies".

Washington has been calling on Israel to halt settlement activities on occupied Palestinian lands, in order not to preempt any peaceful settlement between Palestinians and Israelis, which may lead to the establishment of a Palestinian state with recognized boundaries.