Israeli Prime Minister Ehud Olmert told the Knesset Foreign Affairs and Defense Committee on Monday that, notwithstanding the situation in Gaza, he will not approve the broad military action being advocated by security experts.

Olmert's decision came despite his aides revealing at the weekend that US President George W. Bush had given Israel a green light to invade Gaza when he was visiting the region last week.

Olmert said he believes that the political price Israel would pay to defend the residents of the southern Negev region from ongoing terrorist rocket fire from Gaza would be too high.

Meanwhile, Israeli Foreign Minister Tzipi Livni held the first in a long series of talks with lead Palestinian negotiator Ahmed Qureia aimed at reaching agreements on the core issues preventing the signing of a final status Israeli-Palestinian peace agreement.

The main sticking points are the Palestinians demands that Israel surrender the half of Jerusalem previously occupied by Jordan and that Israel open its borders to millions of so-called Palestinian refugees.

When he visited the region last week, US President George W. Bush insisted that Israel and the Palestinians immediately begin intense non-stop negotiations in order to reach an agreement by the end of his term a year from now.

Speaking to Israel's Ynet news portal, Livni defended her meeting with Palestinian officials even as Palestinian forces continue to attack Israelis.

Livni said that she prefers to believe the conflict is a national one only, which can be solved by hammering out an agreement resulting in two states west of the Jordan River, rather than a religious one to which there is no solution.