Olmert promised Abbas that Israel would not cause a humanitarian crisis in the Gaza Strip, despite its declared intention to carry out limited power cuts to the strip, in response to Palestinian rocket attacks from the territory into southern Israel.
Olmert made the pledge with Abbas at the Israeli leader's Jerusalem residence, a government official said, speaking on condition of anonymity as the meeting was closed to media coverage.
Abbas arrived in Jerusalem in a long motorcade of sedans and SUV's riding in from the West Bank. The two men have recently begun meeting about every two weeks - a breakthrough for the sides after seven years of fighting and diplomatic paralysis.
Despite the cordial atmosphere over lunch, CBS News correspondent Robert Berger reports that the two leaders have some very serious problems to overcome, including the status of Jerusalem, refugees' right to return, and final borders for a Palestinian state.
The meeting lasted about two hours.
A day earlier,for the regional meeting - expected to take place in Annapolis, Maryland in November or December - saying it would not result in a final peace deal with the Palestinians and it might not take place at all.
By all accounts, Olmert and Abbas have developed a good working relationship in recent months. However, Palestinians complain of excruciatingly slow progress in coming up with a joint document before the peace conference.
Palestinian officials said they hoped Abbas and Olmert would be able to overcome sharp differences over the content of a pre-conference statement.
In other developments:
The United States wants Olmert and Abbas to present the joint statement at the conference to pave the way for a full resumption of peace talks.
"Today we expect the Israelis to stop putting obstacles preventing us from reaching a joint statement for the fall summit," Nabil Abu Rdeneh, an Abbas spokesman. "Today they will evaluate what the negotiation teams have achieved and they will try to narrow the gaps between the two teams."
Addressing Jewish fundraisers from Europe and North America in Jerusalem on Thursday, Olmert said he would discuss preparations for the summit when he met Abbas on Friday. But Olmert hinted there was still a chance the conference wouldn't take place.
"If all goes well, hopefully, we will meet in Annapolis," he said. "(But) Annapolis is not made to be the event for the declaration of peace."
Meanwhile, Olmert's government moved closer to a punishing regime of power cuts to the Gaza Strip in retaliation for rocket attacks.
Frustrated by near-daily rocket attacks on Israel's south from the Hamas-controlled Gaza Strip, Defense Minister Ehud Barak gave final approval to a new measure - cutting off electricity to the territory for longer periods every time rockets fall, hoping residents will pressure the militants to halt the barrages.
Saeb Erekat, a negotiator for the West Bank-based Fatah government, appealed for international intervention and called the decision to cut off power "particularly provocative given that Palestinians and Israelis are meeting to negotiate an agreement on the core issues for ending the conflict between them."
The Israeli plan is to cut electricity for 15 minutes after a rocket attack, gradually increasing the cutoff length if the barrages continue. Israeli officials would not say when that would begin.
Palestinians and human rights groups denounced the Israeli measure as collective punishment.
As Israel moved ahead with plans for the power cutoff, Israeli troops continued operations against Gaza's militants. Palestinian officials said five gunmen died in battles across Gaza on Friday.
In Gaza, Ismail Haniyeh, head of the Hamas government, said the meetings between Abbas and Olmert are meant to distract from Israeli attacks and sanctions against Gaza. He said the Mideast conference would offer nothing to the Palestinians.
"These meetings have become a cover for the continued aggression against the Palestinian people," Haniyeh said after Friday prayers in Gaza City. "We warn against the dangers of falling into the traps of American-Israeli policies."