Israel-Egypt Mideast Talks Fall Short

A summit between the leaders of Israel and Egypt on Thursday fell short of its goal of igniting a new round of Mideast peace efforts, highlighting the significant disagreements between Israel and its Arab neighbors.

Speaking at a news conference after the meeting, Egypt's President Hosni Mubarak pushed Israel to hold talks with Syria and pursue peace with the Palestinians, despite the rise of the Islamic militant group Hamas.

He also condemned an Israeli raid in the West Bank on Thursday in which undercover troops burst into a West Bank vegetable market, seized four fugitives and exchanged heavy fire with Palestinian gunmen. It's the first major raid since the Israeli and Palestinian leaders agreed to try to ease tensions between the sides.

Four Palestinians, all civilians, were killed and 20 wounded in the fighting. Palestinian President Mahmoud Abbas said in a harshly worded statement that Israel's peace promises rang hollow in light of the raid and demanded $5 million in compensation for the damage to shops and cars in Ramallah.

Mubarak, a key mediator between the Palestinians and Israel, stressed that "Israel's and the region's security would be achieved only by serious endeavors toward peace."

Israeli Prime Minister Ehud Olmert apologized for civilian casualties in the raid, which began when undercover troops seized four fugitive Palestinians in a Ramallah vegetable market, sparking a ferocious gun battle with militants.

"Things developed in a way that could not have been predicted in advance. If innocent people were hurt, this was not our intention," he said.

The summit came amid international calls for Israel and the Palestinians to make a renewed effort to end their dispute in the interest of stabilizing the Middle East, particularly Iraq. It also comes ahead of an expected Mideast visit by Secretary of State Condoleezza Rice this month.

Egypt is eager to broker peace between the Palestinians and Israel, and Mubarak on Thursday said he would welcome a meeting bringing together himself, Olmert, Palestinian President Mahmoud Abbas and Jordan's King Abdullah II.

"After the situation is crystallized, there is no objection for a quartet meeting," he said.

But significant obstacles are blocking a new peace process, including the continued captivity of an Israeli soldier seized by Hamas-linked militants in June. Egypt has been trying to broker a deal for Cpl. Gilad Shalit's release, and many in Israel were hoping for a breakthrough at the summit.

A Hamas official on Sunday claimed progress was made toward an agreement to exchange Shalit for some of the 9,100 Palestinians in Israeli prisons. A senior Hamas official in Syria, Moussa Abu Marzouk, said Thursday that his group was also ready to give Israel a video of Shalit if it agreed to release women prisoners and other detainees. He said in a phone interview that Shalit is alive.

Olmert thanked Mubarak for his efforts to secure Shalit's freedom, and said Israel was ready to meet with Abbas. However, he rejected having any dealings with Hamas, which controls the Palestinian Cabinet and calls for Israel's destruction.

"We are ready at any time to meet with Abu Mazen (Abbas) and have real negotiations and have an atmosphere for peace," Olmert said, adding that Abbas was a "partner for peace" and Hamas leader Khaled Mashaal was not.

Mubarak responded that not everyone in Egypt supported its peace agreement with Israel, but it did not stop Egypt from signing the treaty.

The Egyptian president hosted Abbas at a summit here on Dec. 27, four days after Olmert met with Abbas in a meeting intended to thaw relations between the sides. The Olmert-Mubarak meeting was expected to build on those earlier efforts, but did not appear to have achieved any major breakthroughs.

Mubarak expressed concern about the violence between Israel and the Palestinians and between rival Palestinian factions, but said they should not dampen peace efforts.

In Gaza, six Palestinians, including a senior security officer, were killed and more than a dozen wounded in a new wave of fighting between gunmen loyal to Hamas and those allied with Abbas. The widening chaos was driving ordinary Palestinians deeper into despair about their future.

CBS News correspondent Robert Berger reports the fresh round of violence has shattered hopes that the latest truce agreement between the factions might hold, and renewed fears of a civil war in the Palestinian territories.

"We have to work with both sides, with the Palestinian side to reach a cease-fire among them. They must unite and solve their problems, and then we can see how to deal with the Israeli side so they can sit at the negotiating table and reach peace. It is a tough task but can't be skipped," Mubarak said.

Olmert said he expressed concerns to Mubarak about the ongoing smuggling of weapons and money from Egypt into the Gaza Strip. Israel and the West have imposed a financial embargo on the Hamas government, but top Hamas leaders have kept the government afloat by bringing suitcases stuffed with millions of dollars over the border.

Mubarak said he was doing his best to stop weapons smuggling into Gaza, but said the cash-filled suitcases were not illegal as long as they were declared.

He also urged Israel to accept Syria's offers to restart peace talks that broke down seven years ago. Olmert has rejected the offers, citing Syria's support for Hamas and the Hezbollah guerrilla group in Lebanon.