But Israel cautioned against expecting any rapid progress in the run-up to a U.S.-led conference tentatively planned for mid-to-late November in the Washington area.

Washington is pushing a reluctant Israel to make tangible progress to avoid disappointment at the conference, which Western diplomats say could culminate in an agreement to relaunch full-blown peace negotiations.

After their three-hour meeting, Olmert and Abbas “emphasized the importance of their joint commitment to a two-state solution and decided to appoint teams in order to work towards achieving this goal”, said Olmert’s spokeswoman, Miri Eisin.

Abbas aide Saeb Erekat said the appointment of the teams was a “significant development” but offered no details.

Eisin cautioned against expecting rapid-fire progress in the run-up to the conference, tentatively planned for mid to-late November in the Washington area.

Eisin said after the session in Olmert’s official residence in Jerusalem there had been no discussion of timetables.

“Both sides would like to see the success of the international meeting, but the meeting (in November) is not the end-game.”

Olmert and Abbas have been meeting regularly since Hamas Islamists seized control of the Gaza Strip in June and are keen to show progress ahead of next week’s visit of U.S. Secretary of State Condoleezza Rice.

Eisin said Olmert and Abbas had agreed to meet again within the next two weeks.

It is still unclear to what extent Olmert is prepared to meet Abbas’s appeal to delve deeply into the core “final-status” issues of Jerusalem, Palestinian refugees and the borders of a Palestinian state.

The bilateral meetings and the conference are part of a U.S.-led campaign to shore up the Fatah leader’s hold on power in the occupied West Bank and to isolate Hamas in Gaza.

Olmert has also been weakened politically since last year’s war in Lebanon, raising doubts among Israelis and Palestinians over his ability to deliver on any peace promises.

The Israeli leader is seeking a broadbrush “declaration of principles” for the November conference. Abbas wants an explicit “framework” agreement with a timeline for implementation.

Senior Palestinian officials said some progress had been made in recent meetings to narrow the gaps over the nature of a future Palestinian state but that the sides have not yet reached the point of drafting principles.

Eisin left vague the issues to be discussed by the teams, saying “concepts” such as how Gaza and the West Bank would be physically linked, would be addressed.

Eisin said ministers in Olmert’s cabinet would begin holding face-to-face meetings with their Palestinian counterparts in a sign of growing cooperation between the two governments.

Olmert also told Abbas he would ask his cabinet to approve the release of Palestinian prisoners from Fatah. Israel is expected to free around 100 prisoners for the Ramadan fast month, which begins this week.

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