Israeli Prime Minister Ehud Olmert, embarrassed by abruptly announced construction plans that have caused tensions with the Palestinians, laid down the law on Monday: All new West Bank building must receive his personal approval.

The order came in a letter to his Cabinet ministers, obtained by The Associated Press. It came just a week before U.S. President George W. Bush heads to the region, hoping to give a boost to already troubled peace talks restarted after his Mideast conference a month ago.

Olmert was caught by surprise when, on the eve of Bush's conference, an Israeli bureaucrat released a call for bids on 307 new housing units in Har Homa, a Jewish neighborhood in a part of Jerusalem claimed by the Palestinians. Also, new construction was announced for Maale Adumim, a settlement next to Jerusalem.

The ensuing dispute dominated the first two rounds of renewed peace negotiations, before Palestinians decided to downplay it in advance of Bush's visit next week.

On Monday, Israeli Foreign Minister Tzipi Livni met chief Palestinian negotiator Ahmed Qureia in Jerusalem, the Israeli foreign ministry said. It gave no details of the talks.

Also Monday, Palestinian President Mahmoud Abbas took a relatively conciliatory tone toward the Islamic Hamas, which routed his Fatah forces in Gaza and overran the territory in June.

Marking the 43rd anniversary of the founding of the Fatah movement, Abbas again rejected the Hamas takeover but called for talks to resolve differences.

"There is no way for any party here to be an alternative to the other, and there is no room for terms like coup or military takeover, but only for dialogue, dialogue, dialogue," Abbas said. Up to now Abbas has said Hamas must relinquish control of Gaza before talks with Fatah.

In the speech, which lasted nearly an hour and a half, Abbas also repeated his call for early elections "as a way out of the hell that was imposed on us." He did not give a proposed date.

Hamas spokesman Fawzi Barhoum rejected Abbas' speech. "It is full of incitement and words calling for divisions," he said. "There is no new initiative or practical step in this speech that can pave the road to start an immediate dialogue."

After nightfall Monday, Fatah backers fired rifles in the air all over Gaza and set off fireworks to mark the anniversary. In the southern Gaza city of Khan Younis, three people were killed in clashes, medics said, identifying them as two Hamas police officers and a Fatah backer. Hamas said the two officers were shot by gunmen on rooftops.

These were the first fatalities in Fatah-Hamas fighting since November 11, when Hamas forces opened fire on a huge Fatah rally, killing eight and wounding about 85.

There were also exchanges of fire in Gaza City, where one person was killed, hospital officials said. He was not immediately identified. At least 60 people were wounded in Gaza, medics said.

The Palestinian political turmoil began with a 2006 Hamas election victory that swept Fatah from power. Israel and the West, labeling Hamas a terrorist organization, cut off vital foreign assistance, plunging the West Bank and Gaza into an economic abyss.

Gaza's takeover of Gaza has changed the equation. Abbas expelled Hamas from the government and set up his own, which in effect runs only the West Bank. The West restored aid to Abbas and encouraged renewed peace talks with Israel. At Bush's conference last month in Annapolis, Maryland, Olmert and Abbas pledged to restart negotiations and aim for a peace treaty in 2008.

But the construction dispute quickly got in the way.

In his speech Monday, Abbas called on Israel to cease settlement construction and dismantle its separation barrier in the West Bank, saying they "undermine the basis of the independent Palestinian state and block the two-state solution."

Though the 307-unit Har Homa project would bring only a tiny addition to the 180,000 Israelis who already live in east Jerusalem, Palestinians made it the central topic of the first two rounds of peace talks, and the U.S. also criticized it.

Olmert's letter puts the authority to approve further West Bank construction squarely in his hands.

"Establishment, new construction, expansion, preparation of plans, publication of residency bids, confiscation of land and all other activities related to Israeli settlement of the area shall not go forward and shall not be carried out without requesting and receiving in advance approval by the defense minister and the prime minister," read the letter to his Cabinet.

These orders do not apply to east Jerusalem Israeli government spokesman Mark Regev said, because from the Israeli perspective, "the West Bank is not Jerusalem, and Jerusalem is not the West Bank."

However, the message from Olmert was clear — no more surprises that embarrass him in front of the Americans and Palestinians.

Israel captured both the West Bank and east Jerusalem in the 1967 Mideast war. Though the Palestinians regard Jewish neighborhoods in both territories to be settlements, Israel says that label does not apply to east Jerusalem, which it annexed shortly after the war.

The international community has not recognized the Israeli annexation.