Israeli Prime Minister Ehud Olmert revealed this week that he has for weeks been holding talking with Palestinian Authority Chairman Mahmoud Abbas on a final status peace agreement.
The talks are focused on resolving the primary outstanding issues between the two sides, such as the borders of a future Palestinian state, control of Jerusalem and the Palestinian demand that millions of so-called refugees be allowed to take up residence inside Israel.
The two leaders are holding the talks in an effort to bridge their gaps before a major Middle East peace summit being hosted by US President George W. Bush in November. Both Olmert and Abbas want to be able to present a final status peace agreement at that time.
Observers noted that the Palestinians would only be likely to accept a final status deal that met 100% of their demands, which include a full Israeli withdrawal from Judea and Samaria, surrender of the eastern half of Jerusalem, and the absorption of millions of Arabs.