Sharon, Abbas say it's time for Mideast peace

9.00am

JERUSALEM - The Israeli and Palestinian prime ministers addressed their peoples together for the first time from Jerusalem today, delivering a commitment to peace from the city at the heart of the Middle East conflict.

"We stand before a new opportunity for the possibility of a better future for both peoples. A future full of opportunities and hope is today closer than in the past," said Ariel Sharon, standing beside Mahmoud Abbas.

A live TV broadcast of their news conference showed members of the Israeli and Palestinian cabinets sitting together and chatting -- an extraordinary scene after 33 months of fighting since the Palestinian uprising against Israeli occupation began.

But the positive mood was offset by violations of a truce called by Palestinian factions, underscoring the enormity of the task ahead in implementing the US-backed peace plan.

Sharon, a right-wing former general, said Israelis did not want to rule Palestinians in territory Israel captured in the 1967 war, or determine their future, but that peace would not be possible if Palestinian "terror" continued.

Abbas and Sharon ended the news conference with a long handshake, looking into each other's eyes.

They then held talks in Sharon's Jerusalem office on ways of advancing the peace plan following the truce declaration and a partial Israeli military pullback from occupied territory.

Palestinian Information Minister Nabil Amr said they had agreed to meet again sometime next week.

At the news conference, Abbas said Palestinians wanted an end to the conflict, marked by scores of militant suicide bombings and crushing Israeli army incursions into self-ruled Palestinian areas.

"The only way to progress is through dialogue, discussions and negotiations," the recently appointed democratic reformer said. "Our conflict with you is a political conflict and we will end it through political means.

"We have no hostility with the Israeli people and we have no interest in continuing the conflict with them."

Sharon spokesman Ra'anan Gissin said later the meeting was about "...getting down to business with a positive approach, looking forward rather than dwelling on the past."

A Palestinian official at the talks also characterised them as "positive" and said that Abbas anticipated good faith from Israel and that the militant truce would hold barring Israeli measures to escalate the situation.

"We can do this together and the conditions now are promising to make further progress," the official quoted Abbas as telling Sharon.

The United States was quick to welcome the meeting. "It's an encouraging moment when you see the two leaders speak like that," said White House spokesman Ari Fleischer.

The Palestinians asked for a prisoner release and freedom of movement for their president, Yasser Arafat. Sharon said a list of prisoners to be freed would be presented at the next meeting but rejected the Arafat request, an Israeli official said.

Instead, Sharon said he would consider allowing Arafat to move from his half-destroyed headquarters in Ramallah to Gaza. Palestinian minister Yasser Abed Rabbo said such an offer "was merely substituting one prison for another prison".

Sharon and Abbas decided to establish four committees to work on humanitarian, security and economic issues and on stopping incitement against Israel among Palestinians.

An Israeli army spokesman said a Palestinian armed with a pistol opened fire at a military roadblock near the West Bank city of Tulkarm and was shot dead by soldiers.

Israel withdrew its forces from much of the Gaza Strip on Sunday and Monday, restoring general free movement for Palestinians for the first time in two-and-a-half years.

Defence Minister Shaul Mofaz confirmed Israel would follow up by handing over the West Bank city of Bethlehem on Wednesday.

The Gaza withdrawal was part of a US-mediated deal involving reciprocal steps leading to the establishment of a Palestinian state in the West Bank and Gaza by 2005.

A US official said Washington would announce a US$30 million ($51.65 million) aid package for the Palestinians tomorrow, to be spent on repairing damaged roads and restoring vital public services.

- REUTERS