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Israeli Prime Minister Ehud Olmert said Monday he will release 250 Fatah members from Israeli prisons in a goodwill gesture aimed at strengthening Palestinian President Mahmoud Abbas after Hamas' victory in Gaza.

Olmert announced the prisoner release at a summit with Abbas and the leaders of Egypt and Jordan that the Arabs and Palestinians are hoping can push forward the peace process and strengthen Abbas' hand.

"As a gesture of good will towards the Palestinians, I will bring before the Israeli Cabinet a proposal to free 250 Fatah prisoners who do not have blood on their hands, after they sign a commitment not to return to violence," Olmert told the gathering.

Ahead of the gathering in this Red Sea resort, a series of messages released by militants underlined Gaza's turmoil.

Hamas-linked militants holding an Israeli soldier for the past year released an audiotape of him urging Israel to strike a deal for his release. A British journalist kidnapped in Gaza appeared in a video wearing an explosives belt that his captors threatened to detonate if security forces try to free him. And Al Qaeda's deputy leader tried to woo Hamas into an alliance and called on Muslims to attack American and Israeli interests in support of the group.

In his speech, Olmert also promised to "improve freedom of movement of the Palestinian population in the West Bank substatinally" and reopen trade ties with the territory, saying he wanted to show the Palestinians that "choosing the path of no terror or violence the way of peace and dialogue will bring a better, more comfortable, more peaceful life."

The bloody conflict between Abbas' Fatah movement and Hamas has effectively split the Palestinians between a Hamas-controlled Gaza Strip and a West Bank, run by Western-backed Abbas' emergency government. The Arabs and Palestinians are pressing Israel to quickly snap up the opportunity to make peace progress with Abbas to boost his legitimacy and swing Palestinians' support his way.

Abbas' officials have called for a lifting of roadblocks and other heavy security measures in the West Bank that they say are suffocating the Palestinians. Abbas, Egypt and Jordan are also hoping the Sharm el-Sheik summit can pave the way for a resumption of negotiations on the key issues of the Israeli-Palestinian dispute.

Olmert did not promise an immediate resumption but said the steps he was taking aimed at leading to such negotiations. "I don't intend to let this opportunity pass," he said, adding that he "told Abbas that we will work with the new government and maintain frequent meetings with it."

Egypt called the summit in a bid to boost Abbas and isolate Hamas, amid fears that its rule in Gaza could foment extremism that could spill over into Egyptian territory.

Speaking in Gaza on Sunday, deposed Palestinian Prime Minister Ismail Haniyeh of Hamas, denounced summit hopes as "illusions" and a "mirage."

"The Americans won't give anything. Israel won't give us anything. Our land, our nation will not come back to us except with steadfastness and resistance," he said.

Olmert's Cabinet on Sunday approved the release of tax funds that Israel collects on behalf of the Palestinians but has withheld since Hamas swept Palestinian parliamentary elections in January 2006. Israel is holding $550 million in frozen funds, but the Cabinet decision did not say how much of the money would be released, or when.

The Israeli freeze on the money rendered past Palestinian governments unable to pay full salaries to government employees, causing hardship in the already impoverished territories.

The Sharm el-Sheik summit comes a day ahead of a gathering in Jerusalem of the Quartet of Mideast negotiators — the U.S., EU, U.N. and Russia. The hope is that the meeting in Egypt could lead to more in-depth international efforts to prod peace talks that broke down amid violence in 2001.

At the same time, momentum is growing for outgoing British Prime Minister Tony Blair to be named as an international envoy for the Middle East. The Financial Times newspaper reported Monday that the Quartet members had agreed to confirm his appointment at their Jerusalem gathering.

On Tuesday, Mubarak is to meet with Saudi King Abdullah in Sharm el-Sheik, seeking to unify an Arab front behind Abbas.

Mubarak is afraid a Hamas-ruled Gaza on his country's border could embolden Egypt's own banned Islamic opposition, the Muslim Brotherhood, and spawn terror attacks. Abdullah is afraid the Fatah-Hamas conflict could spread to the West Bank and spill over to neighboring Jordan, where about half the population is Palestinian.

And both, along with Saudi Arabia, are afraid Gaza could become a forward position for their regional foe, Iran.