PALESTINIAN PRESIDENT Mahmoud Abbas has said he is ready to resume peace talks with Israel as soon as all settlement activity is frozen.

Mr Abbas was speaking after meeting Egyptian president Hosni Mubarak to discuss a US plan for a Palestinian state by 2012.

According to the Cairo daily Al-Ahram, the US proposes negotiations restart as soon as possible. The should begin with the border between Israel and Palestine, with the aim of reaching agreement before the end of Israel’s restri- ctions on settlement construction in the West Bank.

The status of occupied East Jerusalem, demanded by Palestinians as the capital of their future state, and the fate of five million Palestinian refugees would be discussed in subsequent negotiations.

Washington would guarantee the two-year deadline for the creation of a Palestinian state would be met. Moreover, Israel would retain significant settlement blocs in exchange for the transfer of territory to Palestine.

Washington has, apparently, pledged to back Egypt’s call on Israel to halt all settlement activity in East Jerusalem and the West Bank. The US has also backed the call for the release of high-profile Palestinian prisoners and trans- fer of West Bank land to Palestinian control as confidence-building measures.

The Abbas-Mubarak meeting follows a summit between the Egyptian leader and Israeli prime minister Binyamin Netanyahu during which Mr Netanyahu agreed to discuss all issues in final status talks and accepted the two-year time frame. He had previously said he would not speak about refugees or East Jerusalem.

On Sunday, Mr Abbas met Egyptian intelligence chief Omar Suleiman. Mr Suleiman is the official in charge of reconciliation talks between Hamas and Fatah.

This encounter coincided with a meeting in Riyadh between Saudi foreign minister Saud al Faisal, and Khalid Mish’al, head of Hamas’s politburo, after which he announced that a deal was in “final stages”.

This would place Gaza under a commission headed by Mr Abbas until presidential and parliamentary elections are held in June.

Egypt and Saudi Arabia have been trying to end the Hamas-Fatah rift since Hamas won the 2006 legislative election. Palestinian unity is seen as essential for progress in talks with Israel.

Fatah signed the Egyptian reconciliation plan but Hamas, which accepted the deal before Fatah, has not signed.

Mr Abbas urged Hamas to send a delegation to Cairo and sign.