Prodded by visiting British Prime Minister Tony Blair , the Israeli and Palestinian leaders on Sunday said they are ready to resume contacts unconditionally — a small step that could lead toward resumption of peace talks.

Blair also tried to draw Hamas into peace efforts, but the militant Islamic group, which controls the Palestinian government, rejected his condition that it first renounce violence and recognize Israel.

Despite Hamas' tough stance, the readiness by Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas to meet were the first sign of movement in peace making in months.

It also provided a welcome boost for Blair, whose domestic woes — including harsh criticism of his Mideast policies — forced him to announce plans last week to leave office within a year.

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"For the past months, the situation has gone backwards and not forwards," Blair said at a joint news conference. But now, he added, "there is window of opportunity, even if it does seem very bleak."

Standing alongside the British prime minister, Abbas said he is prepared to sit down with Olmert.

"We are ready immediately for serious negotiations to end the conflict," Abbas said. "I am ready to meet Prime Minister Ehud Olmert without conditions." Israel said it would work to bring about the meeting soon.

Olmert, who was elected last spring, and Abbas were on the verge of holding their first working meeting in June when Palestinian militants tunneled into Israel from the Gaza Strip and captured an Israeli soldier. That derailed the meeting and sparked a broad Israeli offensive into Gaza.

After Israel's 34-day war against Hezbollah guerrillas in Lebanon ended last month, hopes for dialogue seemed even dimmer.

Olmert insisted there could be no talks before the release of the captive soldier, while Abbas demanded an Israeli commitment to release Palestinian prisoners.

In talks with Blair on Saturday, Olmert dropped his demands and declared he, too, was ready to meet the Palestinian leader without conditions.

Olmert began calling publicly for talks with Abbas last week after the shelving plans for a large-scale, unilateral pullback from large parts of the West Bank.

Still, Israeli and Palestinian officials said Blair's efforts were helpful in bringing them together. Both sides declined to say when the meeting might take place or what would be on the agenda. But they made it clear that they expect to go beyond formalities.

Israel is likely to push for the release of the soldier, Cpl. Gilad Shalit, who was taken by militants linked to Hamas. The Palestinians, meanwhile, will likely seek help in easing tough economic conditions in the Gaza Strip and urge Olmert to free some of the thousands of prisoners Israel is holding.

"It must be a real working meeting, but we should not expand expectations," said Palestinian lawmaker Saeb Erekat, a confidant of Abbas.

Olmert's spokeswoman, Miri Eisin, said Israel is interested in bolstering Abbas, who is locked in a power struggle with Hamas.

"It's important to show support for moderate voices in the Palestinian community," she said. She said Israel is prepared to take unspecified "creative" actions that go beyond humanitarian gestures. But she ruled out a Palestinian prisoner release until Shalit returns home.

Israeli Foreign Minister Tzipi Livni said peace talks based on the internationally backed "road map" peace plan are out of the question as long as Hamas remains committed to violence.

"In the first stage (of the plan), there is a cessation of war and the disarming of terror groups," she told Channel 2 TV. "It also is the opinion of the international community that a Palestinian state can't be a terror state."

Israel and the West have branded Hamas, which is sworn to Israel's destruction, a terrorist group and have been boycotting it since it swept Palestinian legislative elections in January. But they consider Abbas an acceptable channel for communications.


Abbas, who leads the rival Fatah party, has been urging Hamas to join him in a "unity" government. He hopes a coalition will force Hamas to soften its ideology and help lift painful economic sanctions. Abbas headed to Gaza later Sunday to begin a new round of talks.

Blair welcomed Abbas' efforts, saying the world should fully restore contacts with the Palestinians if Hamas agrees to a unity government.

But he said such a coalition would have to accept conditions set by the international sponsors of the "road map" — renouncing violence, recognition of Israel and acceptance of previous peace agreements.

"If such a government is formed, I believe it is right that the international community deal with such a government," said Blair, who has refused to meet with Hamas politicians on the trip.

Hamas spokesman Sami Abu Zuhri said the group was ready to ready to form a government with Fatah, but "not according to standards that are dictated." He called the demands "biased, unjust."

While Blair's demands reiterated Western policy, his presence in the West Bank alongside Abbas gave it added heft. Blair's aides said he was trying to boost Abbas and show that Hamas could gain from softening its views.

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