A corruption investigation by Israeli police is overshadowing a planned meeting between Mahmoud Abbas, the Palestinian president, and Ehud Olmert, the Israeli prime minister.
The pair are set to meet on Monday amid fears the inquiry into Olmert's conduct while he was finance minister could end hopes of a peace deal by the end of the year.
An aide to Abbas said Olmert will not be able to focus on the talks in Jerusalem and an unnamed official in the prime minister's office was quoted as saying "their head isn't into it right now."
Israeli army radio also said that the police findings "will shock the country".
Israeli police questioned Olmert on Friday, the fifth criminal investigation they have opened into Olmert's activities since he took office in 2006.
Olmert is being scrutinised over political appointments and property dealings. He has not been charged. Media have been prohibited from reporting the details of the new case, which is subject to a court-issued gagging order, but the investigation has already led to calls for Olmert to suspend himself or resign.
Israelis 'cynical'
Al Jazeera's Jacky Rowland, reporting from Jerusalem, said that army radio comments of the potentially shocking nature of the case are exaggerated.
She said: "It takes a lot to shock the Israeli public. "Most Israelis are cynical of the political process in this country, and they almost expect politicians to be investigated in this manner."
A few hours before the talks, Olmert met Condoleezza Rice, the US secretary of state - their second meeting in less than 48 hours.
Rice has repeatedly urged Israel to take steps to ease the movement and access for Palestinians in the occupied West Bank.
Mark Regev, Olmert's spokesman, declined to provide any details about the meeting, saying only that "it was a one-on-one meeting that lasted about one hour".
More talks
Olmert is due to host Abbas at his official residence in Jerusalem for their third meeting in less than a month.
The two have held similar meetings several times aimed at advancing peace talks which have made little progress since they were restarted last November amid great fanfare at a US-sponsored conference in the city of Annapolis
Saeb Erekat, a Palestinian negotiator, said Monday's talks would include a broad look at how the negotiations are proceeding.
He also said Abbas would urge the Israelis to curb settlement activity and lift many of the military checkpoints they have erected throughout the West Bank.
The Quartet, which includes the UN, the US, Russia and the European Union, said in a statement on Friday that all Israeli outposts erected after March 2001 should be dismantled.
The negotiations have stumbled amid violence in Gaza and Israel's continued expansion of settlements in the West Bank, including occupied east Jerusalem, which has prompted renewed US and international calls to freeze all settlement activity.
On Sunday, Rice made unusually direct remarks about the consequences of Israeli construction and roadblocks in the West Bank, saying she "continues to raise with the Israelis the importance of creating an atmosphere that is conducive to negotiations".
"That means doing nothing, certainly, that would suggest that there is any prejudicing of the final terms" of a deal setting up a separate Palestinian state in the West Bank, Rice said.
Rice, who arrived in Israel on Saturday, said she remained hopeful the two sides could strike a peace deal by the time George Bush, the US president, leaves office in January 2009.
Bush is scheduled to visit Israel next week to mark the 60th anniversary of its creation.
Roadblock review
Palestinians say that Israel has removed only small barriers or partially dismantled obstacles despite pledging to pull them down.
Rice said she will question the "qualitative character'" of some of the roadblocks Israel has already removed.
"Not all roadblocks are created equal," she said.
"The first thing we are going to do is to review the ones that were supposedly moved."
"We don't want to get into a numbers game where you just remove 'X' number of roadblocks but it's not improving the lives of the Palestinians."
Since 2000, Israel set up a network of hundreds of checkpoints, gates and barriers in the occupied West Bank.
After Rice's last trip in late March, Israel said it planned to remove 61 barriers but a UN survey subsequently found that only 44 obstacles had been scrapped and that most were of little or no significance.
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