GAZA CITY, 7 June 2007 — A summit meeting between Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert was called off yesterday with Abbas seeking commitments that Israel will release frozen Palestinian funds and take other steps.

“Abbas will not meet Olmert unless he responds to Palestinian demands, or at least some of these demands,” Palestinian Foreign Minister Ziad Abu Amr said.

Olmert and Abbas were due to meet in Jericho today for what would have been their first encounter in the occupied West Bank, reviving US-brokered talks that are supposed to focus on aspects of Palestinian statehood.

Olmert told British Prime Minister Tony Blair by telephone “it was the Palestinians who had requested the postponement for their own reasons,” Olmert’s office said. Government spokesman David Baker said Olmert was ready to meet Abbas at “any time.”

The two sides have been haggling over proposed Israeli confidence-building measures, including release of Palestinian tax funds Israel has withheld since Hamas came to power in 2006 and an easing of travel restrictions in the West Bank.

Olmert has been under heavy US pressure to make gestures that could strengthen Abbas’ secular Fatah faction in its power struggle with Hamas, which leads a Palestinian unity government.

Saeb Erekat, an Abbas aide, said the Palestinians wanted word from Israel it would free up the tax revenues, estimated by Palestinian officials at some $700 million. “We are not setting conditions but these are points that should be agreed upon (before the meeting),” he said.

Meanwhile, Palestinian group Islamic Jihad said yesterday it has developed a new rocket based on the Russian Grad that is capable of hitting strategic targets in Israel. The group has developed “a new generation of rockets capable of striking strategic sites inside the Zionist entity,” an official from the Al-Quds Brigades, Islamic Jihad’s armed wing, said in a statement.

The new weapon contains more explosives and has a greater range, and “successful tests” were held recently, the official added.

— With input from agencies