JERUSALEM -- Israel's Cabinet convened Monday morning to debate the release of Palestinian prisoners and Israeli and Palestinian leaders were due to meet later in the day, as preparations for next week's high-profile Mideast conference called by U.S. President George W. Bush moved into high gear.
On the agenda at the weekly Cabinet session was a proposal to release 450 Palestinian prisoners of about 9,000 Israel is holding. Hard-liners in the Cabinet were opposed, while Palestinians demanded freedom for at least 2,000.
Cabinet hawk Avigdor Lieberman said that although the candidates for release had not directly participated in attacks on Israelis their intentions were not peaceful.
"They intended to kill, to murder," he told Israel Radio. "They did not succeed because of the security services, because of the army."
Although Lieberman said he would argue against freeing the latest batch of prisoners, Prime Minister Ehud Olmert was expected to win a comfortable Cabinet majority.
With the Mideast gathering set tentatively for next week in Annapolis, Maryland, Israel and the Palestinians have so far failed to reach any prior agreements. Olmert was to meet Palestinian President Mahmoud Abbas in Jerusalem Monday, the latest in a series of summit meetings to coordinate positions.
On Sunday, Israeli officials said the U.S. was pushing for an Israeli pledge to halt all construction in West Bank settlements as a prelude to the Annapolis meeting.
Palestinians have long made that demand, and Israel committed to that when it accepted the "road map" peace plan in 2003. Since then, however, Israel has insisted on the right to expand it settlements to account for "natural growth."
In the run-up to the conference, Israel hoped for U.S. backing to continue building in settlement blocs Israel hopes to keep when the border with a Palestinian state is drawn - but an Israeli official said the U.S. rejected that, pressing for a total construction freeze.
Officials at the U.S. Embassy did not return messages seeking comment.
In a boost for peace efforts, international Mideast envoy Tony Blair said Israel and the Palestinians will announce on Monday a number of economic projects that could create tens of thousands of jobs for Palestinians.
The projects are "designed to give some sense things could change on the ground," Blair said in a joint news conference in the West Bank with Palestinian Prime Minister Salam Fayyad and Kouchner.
Among the projects will be a Turkish-sponsored industrial park in the southern West Bank, a sewage project in northern Gaza and road construction in the West Bank, a Palestinian official said.
Israeli approval of an aid project in Gaza would be particularly significant. Israel virtually sealed Gaza's borders in June, following the violent takeover of Hamas, and since then has only permitted food and medicine to enter. In September, Israel designated Gaza "hostile territory," setting the stage for further sanctions.
The sewage project in the northern Gaza town of Beit Lahiya is seen as urgent. Last year, one of the sewage basins near Beit Lahiya collapsed, flooding a village with waste and killing five people.
Olmert tried to play down pre-conference problems Sunday, telling the visiting French foreign minister, Bernard Kouchner, that "Annapolis can't be a failure, because the very fact that it's taking place makes it a success."
Later, Olmert told a group of his supporters that the real negotiations would take place after Annapolis. He said there are risks and obstacles, but they must be overcome. "if we don't have the courage to deal with that now, we will pay a heavy price," he warned.
U.S. officials are hoping for a large turnout for the conference, including moderate Arab countries that do not have relations with Israel, such as Saudi Arabia.
Key Arab governments will announce Friday if they will attend the conference, an Arab League official said Sunday. Foreign ministers of 12 Arab countries are due to meet with Abbas at the headquarters of the Arab League in Cairo on Friday to forge an Arab strategy on the conference.
Kouchner, the French foreign minister, and his British counterpart, David Miliband, were in Jerusalem on Sunday trying to rally support for the summit.
"The opportunities that are represented by the negotiations that could be started by the Annapolis conference don't come along very often," Miliband told a news conference. "It's very, very important that everyone in the international community does everything they can to provide practical and political support for the two parties."
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