By Aluf Benn, Arnon Regular and Ora Koren, Haaretz Correspondents and The Associated Press - 21/05/2006

Palestinian Authority Chairman Mahmoud Abbas said Sunday that negotiations with Israel are "the responsibility and the jurisdiction" of the Palestine Liberation Organization (PLO), and that he is committed to putting the results of the talks to a general referendum. Click here for full text of Abbas` speech

In a speech to the World Economic Forum on the Middle East in the Egyptian resort of Sharm el-Sheikh, Abbas stressed that "peace is not merely the signature of leaders, it will need the approval of the people, and hence came the idea of a general referendum."

"It is time to end occupation and conflict in the holy land," Abbas said. "We have no choice but to resume a meaningful peace process that leads to the implementation of the road map."

Abbas said that he would head any negotiations with Israel, and not the Hamas-led government, which refuses to recognize Israel, renounce violence or abide by previous peace agreements.

"The political negotiations with the Israeli government are the historical choice of the Palestinian people and are the responsibility and the jurisdiction of the Palestine Liberation Organisation which executive committee I head. Negotiations will take place through the Negotiations Affairs Department of the PLO," he added. "The Palestinian government will not object to this and will not create obstacles before these talks."

But, said Abbas, he would "continue to exert every possible effort to obtain the agreement of the Palestinian government to my political platform, especially regarding the political solution to the conflict and negotiations to establish two states."

Abbas also expressed hope that Israel would abandon the slogan of "no partner," and accept an invitation to return to the negotiating table.

"The drawing of the final borders cannot happen through dictations, but rather in the negotiations," he said. He warned that "unilateralism will quickly put an end to the two-state solution and will increase violence."

Meanwhile, Foreign Minister Tzipi Livni told Egyptian President Hosni Mubarak on Sunday that Israel is trying to help the Palestinian population without aiding terrorist groups in the West Bank and Gaza Strip.

Western aid to the Palestinians has more or less halted since the militant Hamas organization took over the Palestinian government in March. Israel has also suspended its tax revenue transfers to the Palestinian Authority.

In the meeting on the sidelines of the World Economic Forum in Sharm el-Sheikh, Livni reiterated that Israel will not talk to Hamas as long as three international demands - that the group disarm, recognize Israel`s right to exist, and uphold previously signed agreements - are met.

Livni and Vice Premier Shimon Peres also met Sunday with Abbas, in the first talks between the two sides since Hamas took control of the Palestinian government.

After meeting with Abbas, Livni said that "The road map peace initiative is still relevant," and promised that Israel would try to prevent a humanitarian crisis in the Gaza Strip and West Bank.

Palestinian sources said ahead of the meeting that Abbas expects the talks to lead to renewed negotiations between Israel and the PA.

National Infrastructure Minister Benjamin Ben-Eliezer, also attending the conference, said Egyptian Prime Minister Ahmed Nazif asked Israel to continue holding talks with Abbas.

Nazif made the remarks during his meeting with Livni. Finance Minister Avraham Hirchson, Peres and Tourism Minister Yitzhak Herzog, MK Silvan Shalom (Likud) and Avishai Braverman (Labor) also attended the meeting.

Ben-Eliezer said the Israeli delegation clarified that Israel has no problem with the Palestinian people, and that the main problem is that the Palestinian government is unwilling to recognize Israel.

Peres said Saturday that, "there is no government policy to boycott Abu Mazen [Abbas], but negotiations with him can begin only after the prime minister [Ehud Olmert] returns from the U.S. That is the proper order."

Olmert departed Sunday afternoon for his first meeting with U.S. President George W. Bush since he took over as prime minister. Their meeting Sunday is expected to focus on the Iranian nuclear crisis.

The prime minister is expected to meet with Abbas only after a planned round of talks with regional and European leaders. Olmert will go to Britain and France in the second week of June, and in the coming weeks is planning to meet with the president of Egypt, the king of Jordan, the chancellor of Germany, the prime minister of Italy and the coordinator of foreign policy in the European Union.

Also Sunday, the cabinet approved an arrangement to alleviate the health crisis in Gaza: NIS 50 million of PA tax money, frozen in Israel, will be directed to the purchase of medicines and medical equipment. This equipment will be transferred to international aid organizations selected by Defense Minister Amir Peretz, and the organizations will in turn transfer them to the Palestinian health system.

The defense establishment had been deliberating whether to take the funds from Palestinian tax money held by Israel since Hamas came into power, or from money confiscated from Palestinian banks on suspicion that the monies were being used to fund terror.