Israeli Prime Minister Ehud Olmert's cabinet Sunday unanimously approved the transfer of US$100 million in Palestinian tax revenues to President Mahmoud Abbas' office, Israeli officials said.

Olmert had pledged the funds to Abbas at their first formal meeting held on Saturday in Jerusalem.

"The cabinet has approved the transfer of US$100 million via Abbas' office," an official in Olmert's office said. Israeli media said the decision was unanimous.

Israel has been under US and European pressure to take steps to bolster Abbas after he called early elections against his Hamas rivals.

Officials said the transfer may not take place for days or weeks, until Israel receives details of what humanitarian needs Abbas intends to use the funds for.

Israel is seeking assurances that the money will bypass the Hamas-led Palestinian Government.

Olmert told ministers he had had a "good meeting" with Abbas, and that they had agreed to hold further talks and to "launch a dialogue with the Palestinian Authority" in a bid to resume peace talks stalled since 2000.

A Palestinian uprising erupted soon after the last talks collapsed and hopes of reviving them dimmed again when the Hamas Islamist movement rose to power in March.

Israel and Western countries have imposed a financial boycott on the Palestinians to press Hamas to drop its refusal to recognize Israel and renounce violence.

Israel had frozen nearly US$500 million in Palestinians tax revenues as a part of these sanctions.

Shuttle diplomacy

Abbas spokesman Nabil Abu Rdeneh said the meeting established the groundwork for a series of future gatherings between the two leaders.

Israeli Foreign Minister Tzipi Livni warned that the contacts between Abbas and Olmert must be accompanied by a "significant diplomatic effort."

Olmert has made a recent push to restart peace efforts in a move to revitalize his government, which lost popularity in the wake of the summer war with Hezbollah guerrillas in Lebanon.

Last week he met with Jordanian King Abdullah II. Sunday morning he called Egyptian President Hosni Mubarak, and the two leaders "agreed that they would be meeting, and they would be meeting soon," Olmert's spokeswoman Miri Eisin said. She declined to provide more details.

Abbas also planned to go to Jordan today and to Egypt tomorrow to discuss his meeting with Olmert with Abdullah and Mubarak, Abu Rdeneh said.

Egyptian Foreign Minister Ahmed Aboul Gheit will visit Israel on Wednesday for meetings with Israeli officials, an Israeli government official said. Egyptian officials did not immediately confirm Gheit's visit.

Abbas also hoped for a domestic boost from the meeting, especially in the face of a recent outbreak of factional fighting in Gaza between militants from his Fatah group and those from Hamas.

Olmert suggested Sunday he could release some Palestinian prisoners as early as this week even though militants have yet to free an Israeli soldier held in Gaza.

Three senior Israeli cabinet ministers proposed at their weekly cabinet meeting that Israel release prisoners as a gesture to Abbas before a Muslim holiday that starts later this week.

"The time has come for flexibility and generosity, and it (Israeli policy) could be different than what has been said in past meetings," Olmert said in response to the proposal, according to a cabinet source.

In years past, Israel has freed some Palestinian prisoners as a holiday gesture. But Olmert had ruled out any prisoner releases until Gaza militants freed Israeli soldier Gilad Shalit, who was captured in a cross-border raid in June.

(China Daily December 25, 2006)