Olmert Outlines West Bank Plans

Prime Minister Ehud Olmert laid out his vision for Israel's future borders in a major policy speech to parliament on Thursday, saying that the nation needed to rid itself of isolated West Bank settlements but would maintain control over large settlement blocs forever.

These moves would be unilateral, CBS News correspondent Robert Berger reports, because with the election of the Islamic militant group Hamas, Israel says it does not have a Palestinian peace partner.

Olmert, whose Kadima Party won March elections, spoke as he presented his new coalition Cabinet to parliament. The Cabinet, which is expected to implement Olmert's West Bank pullout plan, took office Thursday evening.

"The borders of Israel that will be formed in the coming years will be significantly different from the territories that the state of Israel holds today," Olmert said. "This is the government's plan. This is the basis of its existence."

Olmert said he preferred to reach a deal with the Palestinian through negotiations based on the internationally-backed "road map" peace plan. But if that failed he would act unilaterally to create "desirable" borders for Israel, he said.

But successful negotiations appeared unlikely with the militant Hamas group in charge of the Palestinian Cabinet. Hamas, which is responsible for scores of deadly suicide bombings of Israelis, has refused Israeli and international pressure to renounce violence and recognize Israel.

Palestinian President Mahmoud Abbas, a moderate leader from the Fatah Party, appealed to Olmert in an interview published Thursday to resume peace talks with him immediately and bypass the Hamas-led government.

"You have a serious partner. We are a partner for negotiations," Abbas told the Israeli daily Maariv.

Palestinian legislator Saeb Erekat said Olmert should take up Abbas' offer to resume talks.

"We urge Mr. Olmert to abandon the ways of unilateralism and opt for a partnership in order to bring about a new reality for Palestinians and Israelis," he said.

Olmert said he would only hold talks with a Palestinian government that fights terror and commits itself to uphold past agreements with Israel.

"A Palestinian government led by terrorist groups will not be a negotiating partner and there will be no real or daily connection with it," he said, adding that Israel would act on its own if the Palestinians do not fulfill its demands.

Olmert presented his plan to parliament as a continuation of last summer's pullout from the Gaza Strip, saying Israel needed to follow through and separate itself from the West Bank Palestinians if it wanted to maintain its character as both a Jewish and democratic state.

"The continuation of the scattered settlements throughout the West Bank creates an inseparable mix of populations that will threaten the existence of the state of Israel as a Jewish state," he said.

Such a pullout would leave major settlements in Israeli hands, he said.

"The Jewish settlement movement and its main blocs will be forever an inseparable part of the state of Israel," he said.

Olmert signifies the transformation of many Israeli politicians from hawks, to reluctant doves willing to relinquish territory, reports . Olmert grew up in an ultra-nationalist youth movement that supported Jewish settlement in all the Biblical Land of Israel, including the West Bank and Gaza. Now, he's prepared to give up large parts of the West Bank, and not even get a peace deal in return. It's a sign that the vision of a greater Israel has been abandoned.

Olmert has cobbled together a coalition that will include 67 of the 120 parliament members. He has pledged to implement his withdrawal plan within four years, but the inclusion of the hawkish, ultra-Orthodox Shas party in the coalition means the future prime minister could find himself with a thin majority in support of the pullout.

Shas will likely resign from the government once the withdrawal is brought to a vote in the Cabinet or parliament, said Hanan Crystal, a political analyst. But Olmert will still be able to get the plan passed because the dovish Meretz Party will support it and the Arab parties will abstain, giving him a 60-50 majority, he said.

Olmert told his incoming Cabinet on Thursday that he was still negotiating with other parties, including Meretz and the ultra-Orthodox United Torah Judaism party. "I hope that the government will be broadened," he said.

Olmert also lashed out at Iran, saying that it "places a heavy shadow on the entire region and threatens the peace in the world."

"The attempt by the tyrannical, dark and terrorist-supporting regime to build nuclear weapons is the most dangerous development in the world today and the international community has to do everything in its power to stop it," he said.

Olmert added that Israel has the ability to defend itself from any threat from Iran, but "only a determined, uncompromising international position against Iran's intentions will be able to stop this danger to the entire world."

In just four weeks in office, Hamas has been backed into a corner.

It can't pay the salaries of its 165,000 employees, the backbone of the labor force, because the West has frozen aid and blocked money transfers from the Arab world. The boycott has cut deep: shops are empty and streets deserted as Palestinians scrape by on dwindling savings.

At the same time, moderate Abbas, who wields considerable power, has stripped the government of some of its powers in recent weeks, assuming control of the border authority and the state-run TV and radio.

In the past month, some 40 people have been hurt, including five by gunfire, in Hamas-Fatah clashes.

Flanked by five burly bodyguards in gray suits, Hamas Prime Minister Ismail Haniyeh assured reporters Wednesday that internal strife "is not going to happen," a sentiment echoed by senior Fatah politicians.

However, the situation could spin out of control. Analyst Moheeb al-Nawaty, author of a book on Hamas, warned that a collapse of the Hamas government would likely lead to chaos, rather than paving the way for moderates to take over.

Hamas spokesman Sami Abu Zuhri agreed. "I think a failure of this government is going to create a situation in which everyone is going to suffer," he said.