Israeli and Palestinian officials discussed a number of sticky issues at an undisclosed European location in preparation for final-status peace talks, the al-Quds newspaper reported Tuesday.
The final borders of the future Palestinian state, the plight of Palestinian refugees, the status of Jerusalem and the future of Jewish settlements built in the West Bank were on the agenda, the Palestinian daily added.
The report quoted a senior Palestinian official as saying that the meeting reflected the willingness of Israeli and Palestinian leaders to fulfill US President George W. Bush will to establish an independent Palestinian state by the end of his presidency next year.
The report also said that Israel initially resisted the meeting but acquiesced to pressure from Washington and the European Union.
Under the Oslo Accord negotiations over final status talks should have ended in May 1999.
Prime Minister Ehud Olmert said Israel was ready to make "painful concessions" to achieve peace with the Palestinians, but warned that no Palestinian refugees will be allowed into Israel's sovereign territory.
The Palestinians insist that all refugees who fled Palestine during the 1948 Israeli-Arab war should be allowed back into their homes according with United Nations Resolution 194.