OLMERT CONTINUES TO CAVE

Olmert Meets Abbas, Israel to Release $100 Million to PA - Aluf Benn and Avi Issacharoff
Prime Minister Ehud Olmert met with PA Chairman Mahmoud Abbas on Saturday and said Israel would allow the transfer of $100 million in frozen Palestinian tax money to the PA to meet humanitarian needs. Israel is to transfer the funds directly to Abbas' office and not to the Hamas-led government. Olmert also told Abbas Israel would have difficulty continuing to show restraint if Kassam rocket fire on Israel continued. (Ha'aretz)

Olmert suggests early Palestinian prisoner release. (Reuters)
JERUSALEM (Reuters) - Israeli Prime Minister Ehud Olmert suggested on Sunday he could release some Palestinian prisoners this week even though Gaza militants have yet to free a captured Israeli soldier. Israel has been under U.S. and European pressure to take steps to bolster Palestinian President Mahmoud Abbas of Fatah after he called early elections against his Hamas rivals. ... Three senior Israeli cabinet ministers proposed the release of some prisoners as a gesture to Abbas before a Muslim holiday that starts later this week. A cabinet source said Olmert responded to the proposal by saying: “The time has come for flexibility and generosity, and it (Israeli policy) could be different than what has been said in past meetings.”

Israel might free Palestinian leader in jail swap (MSNBC)
JERUSALEM - Israel said on Sunday it would consider freeing Palestinian leader Marwan Barghouthi from jail as part of a prisoner exchange deal.

The comment by Minister of Pensioner Affairs Rafi Eitan, a former operative of the Mossad security force, suggested a change in Israel’s longstanding refusal to consider freeing Barghouthi as it tries to bolster President Abbas in his showdown with Hamas.

Barghouthi, a popular member of Abbas’s Fatah faction, was jailed by an Israeli court for five life terms for ordering attacks as part of the Palestinian revolt against occupation. He denied the charges. ...

In the past it has opposed freeing inmates it says have “blood on their hands”, but lately it has signaled more flexibility amid pressure from the United States and European powers to help boost the moderate Abbas.

Israel lifts roadblocks after meeting (JTA)
Israel agreed to remove 27 military checkpoints from the West Bank. Israeli Prime Minister Ehud Olmert approved the move Sunday following his Saturday night meeting in Jerusalem with P.A. President Mahmoud Abbas.

“Abu Mazen is an adversary — he is a not an easy adversary, but with an adversary like this, there is, perhaps, a chance of dialogue that will bring an accord between us and the Palestinians,”Olmert said Sunday.

Israel “will not hesitate to strike the terrorists,” he said, but it would also “create a political horizon, create a basis for dialogue, to try to strengthen the moderate elements.”

During the talks, Olmert promised Abbas $100 million from Palestinian tax revenue that Israel collected but froze when Hamas took power last March.

Fatah officials were cautiously optimistic. “It would be a mistake to think that all the problems could be solved in one meeting, but the meeting improved the feeling on both sides,” said Saeb Erekat, a senior aide to Abbas. From the sidelines, Hamas officials mocked Israel’s “trickery.”