JERUSALEM - The Israeli and Palestinian leaders on Tuesday tackled the core issues that have tormented Mideast peacemakers for decades -- Palestinian refugees, final borders and the fate of Jerusalem.
It was the first time Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas addressed the issues in depth and represented an important building block for a U.S.-sponsored international peace conference planned for November.
Olmert met several times with Abbas in the past few months, but had been reluctant to take on the most contentious issues, preferring to focus on general outlines. That approach riled Palestinians, who want to take on the core questions of Palestinian statehood.
Heading into the meeting at Olmert's Jerusalem residence, Abbas warned that the fall peace conference would be a "waste of time" if the three big issues were glossed over. After the talks, both sides confirmed that Israel had swept aside its reluctance to address them.
"These core issues have to be discussed on the way to finding a diplomatic solution of two states for two peoples," an official in Olmert's office quoted the Israeli leader as saying.
The official, who agreed to speak only if not identified because the meeting was supposed to be private, said the two sides hoped by late October to come up with a framework for ending their conflict and creating a Palestinian state.
Chief Palestinian negotiator Saeb Erekat said the leaders did not go into the nitty-gritty of the contentious questions or prepare written documents. But he declared that the time has come for action, not talk.
"We are at a stage to reach decisions," Erekat said.
As he entered Olmert's residence, Abbas signed the guest book in Arabic with a wish for peace between the two peoples, the official in Olmert's office said.
The biggest obstacles to a peace accord have been what the final borders of a Palestinian state would be; whether Palestinian refugees from the 1948 war that accompanied Israel's creation would be allowed to return to their original homes in Israel along with their descendants; and whether the holy city of Jerusalem could be shared.
Failure to agree on those issues has scuttled decades of peace efforts, and a successful outcome is far from assured for the international peace conference that President Bush wants to hold.
The violent seizure of the Gaza Strip by the Islamic militants of Hamas in June has created dueling Palestinian governments, with Hamas ruling Gaza and Abbas loyalists in charge in the West Bank. Hamas opposes Israel's existence, while Abbas seeks a political accommodation.
There are problems in Israel, too. With Gaza militants firing rockets at Israel almost daily and Israelis angry over last year's botched war with Hezbollah guerrillas in Lebanon, Olmert might not be able to make the sweeping territorial concessions a final accord would demand.
Still, prospects for peacemaking have been boosted by Abbas' dismissal of the Palestinian government led by Hamas, whose suicide bombers have killed hundreds of Israelis. And Olmert, Abbas and the Iraq-weakened Bush all appear to be hungry for a diplomatic achievement.
Ahead of the meeting, the Israeli newspaper Haaretz reported Tuesday that the sides agreed to set up negotiating teams to advance talks.
Haaretz said Olmert would insist on adhering to the phased approach of the U.S.-sponsored "road map" peace plan of 2003, which called for the disbanding of Palestinian militant groups at the outset and the establishment of a Palestinian state in stages.
The road map foundered shortly after it was presented because both sides failed to carry out initial obligations.
Olmert made clear to Abbas in their meeting that Israel would break off all peacemaking if Hamas was brought back into his government, the official in the prime minister's office said. Hamas, isolated because of its violently anti-Israel ideology and its bloody takeover of Gaza, is interested in finding an accommodation with Abbas' West Bank-based government.
Hamas spokesman Fawzi Barhoum said the Olmert-Abbas meetings would spell the end of Palestinian aspirations to statehood.
"These meetings work to promote internal strife by distracting Palestinian efforts and hindering the establishment of a political system based on purely Palestinian decisions, far from American-Zionist domination," Barhoum said in a statement.
An Israeli government spokesman, David Baker, said Olmert and Abbas discussed ways to strengthen Abbas' security forces and plans to convene a committee of Israeli, Palestinian, Egyptian and U.S. security officials to examine ways to stop arms smuggling from Egypt into Gaza.
Olmert also told Abbas he would soon present a plan that Israeli security officials are drawing up to permit greater freedom of movement within the West Bank, where travel is severely restricted by Israeli roadblocks, Baker said.
A joint Palestinian-Israeli economic council will be launched, apparently in October in Tel Aviv, in the presence of Olmert, Abbas and international Mideast envoy Tony Blair, he added.
