Israel has agreed to attend a Mideast conference in London early next year, backing off its earlier reluctance to participate in the gathering, a senior official said Thursday.

The official, speaking on condition of anonymity, said Prime Minister Ariel Sharon has sent a letter to British Prime Minister Tony Blair saying that Israel is ready to attend the conference, tentatively scheduled for February.

The conference, if it takes place, would signal the international community's biggest diplomatic push in the region since the death of Palestinian leader Yasser Arafat (search) last month.

Blair is expected to discuss the matter during a visit to Israel and the Palestinian areas next week. Britain's Foreign Office on Thursday declined to give details about the possible conference.

While planning is still in its early stages, Israeli and Palestinian officials have already signaled that they have far different expectations for the conference.

Palestinians want the event to be a high-level gathering that will be a springboard for restarting peace negotiations, based on the internationally backed "road map" peace plan.

"I think the focus should be on substance, and the substance here is ending the Israeli occupation," said Cabinet minister Saeb Erekat.

But the Israeli official said the meeting would focus on issues such as reform in the Palestinian Authority (search) and reviving the Palestinian economy.

"There is definitely an understanding between the prime minister and Blair's office on the focus of the conference," the official said.

Still, Israel's agreement to attend signaled a softening in its line. In the past, Israel has been cool to participating in international Mideast conferences, fearing outside intervention in its conflict with the Palestinians.

Earlier Thursday, Dov Weisglass, a top aide to Sharon, expressed high hopes for the London conference, calling it "maybe the most significant development in the near future."

"It will be a meeting between Palestinians, a few European countries and a few American officials," he said. "It will entirely be focused on how the world can help the Palestinians prepare themselves for the new era."

He also praised the new Palestinian leadership as "normal people" that Israel can do business with.

Sharon is planning an Israeli withdrawal from the Gaza Strip and small parts of the West Bank next year. Sharon refused to coordinate the pullout with Arafat, whom Israel shunned, charging that he was involved in terrorism.

But since Arafat's death on Nov. 11, Israel has noticeably softened its attitude toward the Palestinians, tacitly welcoming the interim leader, Mahmoud Abbas (search), and hinting at cooperation after a Jan. 9 election to replace Arafat.

"Things are completely different for the current leadership," Weisglass said. "These are normal people ... who understand that such a small, fragile and weak community, such as the Palestinian community, cannot seriously exist for a long time in a state of total isolation from the rest of the world."

"If they want to integrate in the international community, they will have to accept the rules of the game," he added.

Weisglass said progress would depend on the Palestinians' ability to crack down on militants, adding that the Gaza withdrawal is "not necessarily the last step" that Israel will take and that Israel remains committed to the road map.

On Wednesday, Israel's foreign minister, Silvan Shalom, gave the road map its strongest Israeli stamp of approval since the plan collapsed last year shortly after its launch.

The plan calls on the Palestinians to crack down on militants, and requires Israel to freeze settlement construction and dismantle unauthorized settlement outposts in the West Bank. Neither side has carried out its obligations.

Shalom called for reconvening the summit held in June 2003 at the Jordanian resort of Aqaba, where President Bush launched the plan.

Officials in Sharon's office said the premier disagrees with his foreign minister and rejects the idea of reconvening the Aqaba summit. Sharon was to address the Herzliya conference on Thursday.