Mark Regev, an Israeli spokesman, likewise gave no details saying only: "I can say unequivocally that there was progress reached in this meeting today."
 

After meeting with Frank-Walter Steinmeier, Germany’s foreign minister, Abbas said any political agreement with Israel is not possible under the settlement expansion.  

 
Housing plans
 

Overshadowing the meeting was Israel's decision to build hundreds of new settler homes on occupied land in east Jerusalem.

 

Israel announced their plans on Sunday to build nearly 900 additional homes in East Jerusalem, the sector of the holy city the Palestinians want as the capital of a future Palestinian state. 

 

Olmert praised the plan to build an additional 763 housing units in Pisgat Zeev and 121 housing units for Har Homa settlement in Jabal Abu Ghneim.

 

"We need to continue to strengthen Jerusalem as the capital of the state of Israel," he told his Kadima party.

 

For some Palestinians, Israel’s decision to plant new colonies means working harder.

 

Mohamed Elian, a farmer in Wadi Fukin, a well preserved village 8km west of Bethlehem, said: "Only keeping the land planted would protect it from confiscation by the Israelis. That's why I have to stay here. Land titles mean nothing to them. You have to keep the land green to prove you're here".

 

The community in Wadi Fukin is endangered by massive urban development surrounding the village and Mohamad's land is next to the expanding illegal Israeli settlement Bitar Ileet.

 

Bitar Ileet is now home to at least 30 thousand Israeli settlers where official Israeli commitment to stop settlement expansion means little.

 

Before meeting Olmert on Monday, Abbas denounced the Israeli construction.

 

"If Israel does not stop these settlement activities, then it is difficult to reach a peace agreement," he said.

 

Israel says it is building only in places it intends to keep under a peace accord.

 

These include major settlement blocs, where the vast majority of West Bank settlers live, and east Jerusalem, which Israel annexed after the 1967 war. The annexation has never been internationally recognised.

 
Public criticism
 
The talks also take place as Olmert faces strong public criticism, following hours of testimony by a key witness in a corruption investigation.

 

Testimony by Morris Talansky, an American businessman, painted Olmert as accepting hundreds of thousands of dollars in personal loans to sustain a lavish lifestyle.

 

Talansky's testimony prompted calls for Olmert to step down.

 

But Olmert has denied any wrongdoing, saying he will only resign if indicted.

 

Recent opinion polls suggest that if a snap election was called, Benjamin Netanyahu, the opposition leader who is known to take a hard line against the Palestinians, would sweep to power.

Source: Al Jazeera and agencies