Israelis, Palestinians Hold High-Level Talks

JERUSALEM, Sept. 2 -- Israelis and Palestinians on Wednesday held their first cabinet-level talks since conservative leader Binyamin Netanyahu took over as Israeli prime minister in March, a tentative overture as the United States pushes for a full resumption of peace talks.

The meeting between Palestinian Economy Minister Bassem Khoury and Israeli Deputy Prime Minister Silvan Shalom focused on economic cooperation, an area Netanyahu has emphasized since assuming office.

The Palestinian Authority until now has been reluctant to sanction high-level meetings on the issue, citing concern that Netanyahu wants to substitute "economic peace" for the more sensitive political negotiations over creation of a Palestinian state.

But after months in which Netanyahu has gradually dismantled checkpoints in the occupied West Bank and the Obama administration has nudged the two sides to resume talks, Khoury and Shalom and their aides met at Jerusalem's King David Hotel to discuss ways to bolster the Palestinian economy.

Wire services quoted Israeli officials as saying that the two sides had agreed to meet regularly from here on and to establish working groups to tackle specific problems. A recent International Monetary Fund report said the West Bank economy was on track to grow 7 percent this year, and Netanyahu spokesman Mark Regev said the aim is to help it "reach double digits" next year.

"We hope it will not only be words but there will also be some actions on the ground as well so we can really see the end of these measures that are stifling the growth of the Palestinian economy," Khoury said.

Though focused on economic issues such as border crossings, import rules and joint industrial projects, the session carried political significance as well.

Although aspects of life in the West Bank are improving, the Hamas-ruled Gaza Strip remains under an Israeli embargo, calibrated to provide just enough food, fuel and other necessities to avoid a humanitarian crisis. The militant group has been holding a captured Israeli soldier for more than three years and until a recent war with Israel regularly fired missiles and mortar shells at nearby Israeli towns.

The Palestinians may hold elections as early as January, and U.S. and Israeli officials hope that steady improvements in life in the West Bank will bolster Palestinian Authority President Mahmoud Abbas and undermine Hamas.

Obama has said that he wants the two sides to resume full peace negotiations as soon as possible, and there have been reports in the Israeli news media of a possible meeting between Obama, Netanyahu and Abbas when the U.N. General Assembly convenes this month.