Prime Minister Ehud Olmert on Thursday played down expectations for an upcoming U.S.-sponsored peace summit, saying the gathering would not produce a binding peace agreement with the Palestinians and might not even take place.

Olmert's comments came as his defense minister gave the final approval for Israel to begin phased cutoffs in electricity to the Gaza Strip in response to Palestinian rocket attacks.

Israel has been trying to step up the pressure on the Hamas militant group, which controls Gaza, while also bolstering moderate Palestinian President Mahmoud Abbas, who rules from the West Bank. The upcoming U.S.-hosted peace conference is meant to give an international boost of support for Abbas and restart peace talks.

Speaking to a group of Jewish fundraisers, Olmert said he is committed to making the conference a success and said he would meet Abbas on Friday to review preparations. The conference is expected to take place later this year in Annapolis, Md., although Olmert acknowledged it is not a sure thing.

"If all goes well, hopefully, we will meet in Annapolis," he said. "(But) Annapolis is not made to be the event for the declaration of peace."

Israeli and Palestinian negotiating teams have been trying to draft a joint declaration outlining a future peace agreement ahead of the conference. The teams met Wednesday, but no agreements were announced.

The two sides have expressed vastly different sets of expectations for the summit.

The Palestinians are seeking an agreement addressing the core issues at the heart of the conflict with Israel: final borders, the status of disputed Jerusalem and the fate of Palestinian refugees. They also want a firm timeline for the creation of an independent Palestinian state.

Israel wants a more general document, saying it is premature to address many of these issues.

Olmert has repeatedly warned against expecting too much for the conference. If the gathering falls short of its goals, it could weaken his shaky coalition government and boost Israeli hard-liners.

On the Palestinian side, Abbas could suffer in his rivalry with the Hamas militant group if the conference fails to make progress. Israel and the international community have been trying to rally behind Abbas since Hamas routed forces from Abbas' Fatah movement and violently seized control of the Gaza Strip in June.

With the sides struggling to bridge the gaps, the U.S. has not yet set a date for the summit or even formally announced who will attend.

Washington hopes that moderate Arab countries that do not have relations with Israel, such as Saudi Arabia, will attend. But Arab countries want guarantees of firm results before committing. Egypt and Jordan, the only Arab countries with peace agreements with Israel, have said the U.S. should consider delaying the summit to give the sides more time to work out their differences.

While Israel has been talking peace with Abbas, tensions in Gaza have been rising. Israeli Defense Minister Ehud Barak gave final approval for a plan to cut electricity to Gaza every time Palestinian militants fire rockets into Israel.

The punishment would begin with short cutoffs of 15 minutes, then increase in length if more rockets fall. Israel hopes the sanctions will build pressure on militants to halt their near-daily rocket attacks on southern Israel. It remains unclear when the sanctions would go into effect.

Despite the Israeli threats, Palestinians fired two rockets into southern Israel Thursday morning, the military said. No damage or casualties were reported.

Israel provides more than half of Gaza's electricity, so any cutoff would add to the misery in the impoverished coastal area. However, the cuts would not result in a total blackout.

Members of the international community, including U.N. chief Ban Ki-moon, have condemned the Israeli plan as unfair collective punishment. But with its military unable to stop the crude projectiles, Israel says it is running out of options to deal with the rocket fire. Barak has said a large ground offensive into Gaza — something Israel has tried to avoid — will likely be necessary at some point.

Israel's government last month declared Gaza a "hostile territory," clearing the way for Israel to impose the sanctions.

Early Thursday, Israeli soldiers killed two Hamas militants in a clash near the Gaza city of Khan Younis, Hamas officials and the military said. The army said the dead men were carrying an anti-tank missile launcher and assault rifles.

Also Thursday, the Israeli army said it opened fire at a group of militants planting explosives near the Gaza border with Israel. Islamic Jihad said two members were killed. Israel said it arrested one militant.

The U.S. security coordinator in the Palestinian territories toured Nablus, the West Bank's most chaotic city, praising Abbas' attempts to restore order there as a first step toward cementing his rule.

The U.S. security coordinator, Lt. Gen. Keith Dayton, met with Palestinian security chiefs in Nablus, a stronghold of militants and vigilante gunmen.

Some 3,000 Palestinian police have been deployed in Nablus, and 500 more are to arrive in coming days, Palestinian officials said. Dayton said he was told the law-and-order campaign in Nablus is to be the test for the rest of the West Bank.

"I'm here to show American support for this operation," Dayton said. "I work very carefully with the Palestinian security forces, and I must tell you that I have very high regard for the Palestinian security forces."