Friday,March 30,2007

 JERUSALEM (Reuters) – Israeli Prime Minister Ehud Olmert said on Thursday there was a "revolutionary change" in the perception of Arab states toward Israel, Israeli media reported.

"There is a process here that the fighting in Lebanon (last year) has sharpened," Olmert was quoted as saying during a reception for his Kadima party.

"This process has brought the influential countries in the Arab world to begin to realize that Israel is not the biggest of all their troubles. This is a revolutionary change in their perception."

His office and Kadima did not immediately comment on the remarks.

Israel fought an inconclusive war against Lebanon’s Hizbollah guerrillas last year. Many Israelis see the war as a failure and say Olmert’s objectives were never met.

Arab leaders in Riyadh endorsed on Thursday a 5-year-old plan offering Israel normal ties with all Arab countries in return for its withdrawal from land seized in the 1967 Middle East war, the creation of a Palestinian state and a "just solution" for Palestinians displaced in 1948 when Israel was created.

Olmert described the Riyadh summit as "definitely a serious affair".

"We do not delude ourselves. They want us to return to 1967 borders and they also want the right of return (for Palestinian refugees)," he was quoted as saying. Israel has objected to both those proposals. 

"The content is important, but it is also necessary to take into account the atmosphere, the positioning and direction (of the summit)," Olmert was quoted as saying.

Palestinian President Mahmoud Abbas urged Israel not to waste the chance for peace, saying the region would be face the threat of more war without a solution.

Olmert said the Palestinians "were nearing the point where they have to make a decision" regarding Israel. He said when that point was reached "a breakthrough will be made that will make it possible for us to carry out historical processes".

Abbas’s Fatah and Islamist group Hamas formed a Palestinian unity government earlier this month.

Israel continues to boycott the new government until it recognizes the Jewish state and renounces violence.

Olmert said Saudi Arabia was the country that would "eventually determine the Arabs’ ability to reach a compromise with Israel".

"The willingness of the Saudis to lead, to intervene is certainly interesting," he said. "We are not exaggerating this issue, but we are not dismissing it either."

Leaders at the summit gave the green light to a draft proposal which would create a committee that could negotiate details with the Jewish state and others.

"The draft resolutions were adopted by the leaders unchanged," Palestinian Finance Minister Salam Fayyad told Reuters, adding that Saudi Arabia would head the Arab committee established to pursue the Arab initiative.