Ahmed Aboul Gheit, Egypt's foreign minister, was hopeful that progress on the Palestinian issue would be made.

 

"The aim of the meeting is to regain confidence between the Israeli and the Palestinian sides, achieve the return to confidence building between them through agreed upon measures that should be strictly applied until the road is open to restart negotiations between the two sides," he said.

 

No breakthrough

 

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Olmert cautioned that there would be no "dramatic breakthrough" at the meeting, rejecting Palestinian calls to start talks on a peace treaty.

 

An aide to Olmert said that negotiations on a final Israeli-Palestinian peace deal were not going to be discussed, despite being urged by Abbas' Fatah and other Arab countries to take immediate advantage of the Hamas expulsion from the coalition government.

 

David Baker, Olmert's aide, said Israel was "not ready yet to go into final status negotiations."

 

Speaking from Gaza, Ismail Haniya, the sacked Palestinian prime minister, denounced any hope of progress at the summit 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."

 

Criticism

 

"The corrupt regime in Egypt has to defend the more corrupt regime [Fatah] in the occupied territories"

Magdi Mehna, Egyptian columnist

In Egypt, Mubarak's decision to call the summit has been greeted with criticism.

 

A headline in the leftist Egyptian weekly Al-Arabi on Sunday, read: "The cursed summit: Tomorrow Olmert leads an Arab alliance in Sharm el-Sheik against Hamas."

 

Opposition members have also voiced displeasure with Mubarak's decision to throw Egypt's weight behind Fatah, saying the movement didn't deserve it.

 

Magdi Mehna, an opposition columnist, wrote in the independent Egyptian daily Al-Masry Al-Youm on Sunday: "The corrupt regime in Egypt has to defend the more corrupt regime [Fatah] in the occupied territories."

 

Cash gesture

 

On Sunday, Olmert's cabinet approved the release of tax funds to the Palestinian emergency cabinet.

 

The funds, which Israel collects 'on behalf' of the Palestinians, have been withheld since Hamas won Palestinian parliamentary elections in January 2006.

 

Israel is holding up to $700m 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, enhancing destitution in the already impoverished territories.

 

The Sharm el-Sheik summit comes a day ahead of a gathering in Jerusalem of the Quartet of Middle East negotiators – the US, EU, UN and Russia.