In an act of good faith, Israeli Prime Minister Ehud Olmert suggested that his government would be willing to release Palestinian prisoners even though the captured Israeli soldiers remain in Gaza but also proposed a formal agreement with the Palestinian Authority. Washington and the EU have been pressurizing Tel Aviv to make proactive goodwill gestures especially to boost the hand of Palestinian President Mahmoud Abbas so the region can benefit from a democratic overthrow of the radical group Hamas. This was especially after the visit of British Prime Minister Tony Blair to the region recently when he lionized Abbas as the savior of Palestinians. Abbas had announced new elections since the Hamas government has run the territories into a stalemate with Israel and rest of the world.

At their first formal meeting in over 6 months on Saturday, Olmert pledged to release USD 100 million withheld by Israel as retribution for Hamas’s hard-line stance against the Jewish nation and refusing to honor prior international commitments and eschew violence. With this revenue, Abbas can demonstrate his capability to soften a hard-line Israeli outlook to PA. However, Olmert promised the money to Abbas and not to Hamas and given the structure of the PA, it is not clear how Abbas will control the funds.

Playing to domestic partners and audience, Olmert reiterated that Abbas is “an adversary” and “not an easy adversary” but said that with “an adversary like this, there is maybe a chance” for “dialogue” and “agreement” between the two parties. Both leaders had pledged to restart stalled peace talks even though Tel Aviv vowed to “harm the terrorists” if necessary “to create a political horizon” and “strengthen the moderate elements” there are “among the Palestinians.” It is not clear what he was hinting but speculation is rife that Israel may not hesitate to act against the Hamas in a hard way to strengthen the hand of the Fattah party led by Abbas.