Olmert says Israel willing to make painful concessions, sees merit in Saudi peace plan

Prime Minister Ehud Olmert, plummeting in the polls and facing a Palestinian government he perceives as hostile, said Thursday that Israel was willing to make "extensive, painful and tough concessions" for peace, to encourage dialogue with its enemies.

A dormant Saudi Arabian plan for a comprehensive Mideast peace - which Israel initially rejected out of hand - could be a "convenient basis" for contacts between Israel and Arab moderates, Olmert told a conference of young Israeli volunteers in Tel Aviv.

"The Saudi initiative is interesting, and has many sections that I would be willing to accept - though, understandably, not all of them - and it could certainly be a convenient basis for continued dialogue between us and Arab moderates," Olmert said.

The Saudi plan calls for full diplomatic relations between the entire Arab world and the Jewish state in exchange for full Israeli withdrawal from lands captured in the 1967 Mideast war. Israel dismissed it outright when it was first proposed in 2002, then hardened its opposition after the Arab League tacked on an addendum endorsing the right of Palestinian refugees and their descendants to return to homes in Israel.

But with recent meetings between Olmert and Palestinian President Mahmoud Abbas yielding sparse results, Israel has begun showing tentative interest in the plan. Arab countries are expected to revive the proposal at a summit later this month in Riyadh, Saudi Arabia.

Arab diplomats said Thursday that the United States has joined Israel in urging Arab leaders to use the summit to revise the proposal to make it more acceptable to Israel.

The push to reinvigorate the Saudi plan comes at a time when many moderate Arab governments are worried about rising tensions in the region and view progress on the Palestinian-Israeli issue as a way to defuse friction and blunt Iran's growing influence.

A regional peace plan on the Saudi model could offer Olmert an alternative vehicle for peacemaking now that he's ruled out bilateral peace talks with the Palestinians.

"This government won't miss a single opportunity to engage our enemies in dialogue," Olmert said. "It is ready to make extensive, painful and difficult concessions to encourage such dialogue." Later, Olmert's spokeswoman, Miri Eisin, clarified that Olmert was not offering concessions in exchange for peace talks _ rather, concessions for peace itself.

Israel has said it will have nothing to do with the new Palestinian governing alliance of Islamic Hamas militants and Abbas' more moderate Fatah because it doesn't recognize the Jewish state's right to exist and hasn't renounced violence.

Talks with Abbas, Olmert has said, are to be limited to humanitarian issues.

Palestinian moderates say recognition of Israel is implicit, and Abbas has said the deal, negotiated last month in the Islamic holy city of Mecca, Saudi Arabia, was the best he could get from Hamas.

After the Olmert speech, Abbas confidant Saeb Erekat invited the prime minister to join the Palestinian president "in launching a genuine peace process."

"I think the Saudi Arabian initiative is the most strategic and most important initiative that came from the Arab world since 1948," Erekat said, referring to the year Israel was established. "I hope the Israelis will accept these invitations and be our partner in peace."

Progress on the peace front would also give Olmert a much-needed boost at home.

Olmert's support crumbled following Israel's war last summer against Lebanese guerrillas, which ended without achieving its declared objectives - crushing the militants, who bombarded northern Israel with 4,000 rockets, and recovering two captured soldiers. Corruption allegations involving him and political allies have only battered him further, reports AP.

Only three percent of those questioned in a recent public opinion poll chose Olmert as the best candidate to lead the country. And a commission of inquiry into the war, which is to release its initial findings next month, recently signaled that Olmert would be in for harsh criticism.