Abbas holds talks with Olmert

Occupied Jerusalem: Israeli Prime Minister Ehud Olmert sat down with Palestinian President Mahmoud Abbas on Monday to talk peace before heading out on a US trip.

Olmert's spokesman would not disclose the Israeli agenda for Monday's talks with Abbas, saying only that "direct conversations between the two leaders is an important part of the process."

After the meeting, the Israeli leader was set to fly to Washington for talks with US President George W Bush and to address AIPAC, the influential pro-Israel lobbying group.

Before meeting with Olmert at his Jerusalem residence on Monday, Abbas denounced Israel's plans to build 900 more houses.

"If Israel does not stop these settlement activities, then it is difficult to reach a peace agreement," he said at a joint news conference at his West Bank headquarters with visiting German Foreign Minister Frank-Walter Steinmeier, who urged both sides to "refrain from anything that would hinder an agreement.''

Palestinian negotiator Saeb Erekat said Monday's talks would also include a review of the last six months of peace efforts, along with discussions on Egyptian-brokered efforts to mediate a cease-fire.

On Monday, Israeli Defense Minister Ehud Barak said Israel did not rule out a large-scale military operation against Gaza militants, but said Israel must first "exhaust all other avenues."