Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert are scheduled to meet on Tuesday in the Jerusalem residence of Prime Minister Olmert, to discuss continuing peace talks between the two sides.
Tuesday’s meeting follows recent declarations from each side, differing over key issues in these talks.

This latest dispute between the two leaders is over the status of Jerusalem. The Israeli prime minister declared that US Secretary of State Condoleezza Rice and Palestinian President Abbas had agreed to delay talks over Jerusalem to the final stage of negotiations.

Israeli media sources said that Secretary Rice had, last week, agreed with Prime Minister Olmert to reschedule the Jerusalem talks, on condition that the delay would not harm the ongoing talks.

During an interview with Jordanian press on Monday, Palestinian President Mahmoud Abbas stated that he had not agreed to the rescheduling of talks over Jerusalem.

Prime Minister Olmert said on Tuesday that the goal of his meetings with President Abbas was to set the ‘basic foundations’ of a Palestinian state, to be established by the end of 2008.

The Jerusalem issue was among core issues that Israelis and Palestinians agreed to reopen during US President Bush’s January visit to the region. Other core issues include Palestinian refugees, political prisoners, borders and security.

Palestinian Prime Minister Salam Fayyad, of the Ramallah-based government, expressed his concern last week over recently-annouced Israeli plans to construct 1110 housing units in Israeli settlements in occupied east Jerusalem, branding them “dangerous to peace-making”.

On Tuesday, Prime Minister Fayyad announced that he did not expect a peace deal between the Palestinians and Israelis due to the slow pace of talks. His comments were made during a meeting with prominent members of the Jewish community in Washington DC.

In a bid to save his coalition government, Israeli Prime Minister Olmert earlier announced that construction of disputed housing units in occupied territory would continue. The governing coalition has been formed of political factions that entirely support the policy of settlement, and the enforced transformation of the demographics of Jerusalem. US officials had said they would “ask for clarifications over new Israeli settlement activities”.

U.S President George W. Bush had urged both sides to conclude a deal by the end of 2008, shortly before his term of office comes to an end in January 2009.

Talks between Israeli officials and the Palestinian Authority were reinstated during last November’s Annapolis conference, on the basis of the US ‘Road Map’ peace plan, designed by President Bush’s administration in 2003.

The Road Map states that Israel should halt all settlement activity in Palestinian areas, and its attacks on Palestinians, and in return the Palestinian Authority will stamp out all Palestinian resistance attacks against Israeli targets.