Defense Minister Ehud Barak, meanwhile, told the meeting that his Labor Party supports a bill offering to pay about 80,000 West Bank settlers to evacuate their homes voluntarily, the Defense Ministry said.

Encouraging settlers to leave peacefully could help smooth the way for a future West Bank withdrawal. The settlers who would be eligible account for nearly one-third of the overall settler population and live outside West Bank communities that Israel hopes to retain in any future peace accord, the ministry said. Settler leaders condemned the proposal.

Olmert spoke during the first Cabinet meeting since last week’s U.S.-hosted Mideast summit, where he and Palestinian President Mahmoud Abbas officially relaunched peace talks and set the ambitious target date for an agreement.

Olmert has made similar qualifications before, but he appeared to be trying to mollify hawkish coalition partners who are wary of his peace moves.

At last week’s gathering in Annapolis, Maryland, the leaders agreed that “an effort will be made to hold accelerated negotiations in the hope that it will be possible to conclude them in 2008,” Olmert told his Cabinet, according to a statement put out by the prime minister’s office. “However, there is no commitment to a pecific timetable regarding these negotiations.”

The deadline is set to coincide with the end of U.S. President George W. Bush’s tenure. After taking a laissez-faire approach to the region for most of his two terms, Bush has recently demonstrated a greater resolve to clinch a peace deal — something that would at least partially eclipse the failures of U.S. policy in Iraq.

Repeating a theme he first sounded two weeks ago, Olmert told his Cabinet that Israel did not have to carry out any part of a future deal before all commitments under a recently revived U.S. peace plan are met.

Under the “road map” peace plan, the Palestinians must rein in militant groups that attack Israel — a task that will be hard for Abbas to carry out so long as Islamic Hamas militants rule the Gaza Strip.

Hamas wrested control of the territory from forces loyal to Abbas in June, and remain firmly in control there. While Abbas claims to have authority over the territory, in practice he does not.

“Israel will not have to carry out any commitment stemming from the agreement before all of the road map commitments are met,” Olmert told his Cabinet.

Rockets fired by Gaza militants land in southern Israeli border towns almost daily, severely disrupting daily life and causing occasional fatalities. Militants also have been smuggling in explosives and weapons through tunnels leading into Gaza from Egypt.

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