Sharon gives Blair's Middle East summit an unexpected boost

Israel is prepared to back a Middle East conference convened by Tony Blair early next year despite having expressed fears that the British plans were over-ambitious and designed to secure an internationally imposed solution to the conflict.

Israel is prepared to back a Middle East conference convened by Tony Blair early next year despite having expressed fears that the British plans were over-ambitious and designed to secure an internationally imposed solution to the conflict.

Ariel Sharon, the Israeli Prime Minister, has written to Mr Blair giving his approval to the conference but stressing that he sees its primary purpose as seeking reform and regeneration of the Palestinian economy. Mr Sharon has been encouragedbyassurances given on a visit early this week to Israel by Sir Nigel Sheinwald, Mr Blair's senior foreign policy adviser, that Britain is not seeking to jump-start a final settlement.

Mr Sharon spoke last night of a "historic breakthrough in relations between us and the Palestinians". He emphasised the "real chance" that a post-Arafat leadership would "truly abandon the path of terror," and recognised that an eventual two-state solution "involved great sacrifice on both sides".

But he also stressed his success in gettingPresident George Bush to agree that any settlement would preserve Israel's "most essential interests ... not demanding a return to the 1967 borders [between Israel and the West Bank], allowing Israel to permanently keep large settlement blocks ... and the total refusal of allowing Palestinian refugees to return to Israel".

British officials maintained a diplomatic silence last night after Mr Sharon's senior adviser, Dov Weisglass, let slip a reference to "the London encounter in February" in a speech at a conference of leading Israeli policymakers here. The conference will be discussed ­ and may be scheduled for announcement ­ when Mr Blair visits Israel and the West Bank next week.

Mr Weisglass said the conference would be a "meeting between Palestinians, a few European countries and a few American officials. It will entirely be focused on how the world can help the Palestinians prepare themselves for the new era."

There was still doubt last night about Israel's precise role at the London conference. While Mr Weisglass's formulation broadly corresponded to the characterisation of the event by Britain, Raanan Gissin, Mr Sharon's spokesman, said that Israel had been invited to attend and was ready to do so at whatever level Mr Blair chose to pitch the event.

London has envisaged the conference as a means of securing international support and help for Palestinian Authority efforts not only to push through economic and political reform but also to strengthen its security apparatus. Some diplomats reasoned that if the new post-Arafat authority could be seen as playing its part in the internationally agreed road map to peace then the US would be more amenable to urging Israel to start taking further steps required of it under the road map.

Saeb Erekat, a Palestinian cabinet minister said yesterday the focus of the conference should be "on substance ­ and the substance here is ending the Israeli occupation". Britain has rejected any idea it ever sought a big international Middle East summit like the Madrid conference called by George Bush Snr after the 1990-91 Gulf War.

Indeed, London was not originally sure about inviting Israel, partly because of fears the conference would degenerate into a row. But after weeks of diplomacy, Israel appears to envisage attending while seeking to narrow the focus mainly on to the Palestinian economy.

Mr Sharon's letter to Mr Blair stresses the importance of Palestinian economic reform because of the tendency of funds destined for the Palestinian Authority to descend into what Mr Gissin said was a "black hole". He said the letter also envisaged discussion of help with regenerating the Palestinian economy. Acknowledging that the conference would also be obliged to discuss security, Mr Gissin added: "Of course this is an issue. You don't get investment while there is terrorism."