Israeli prime minister Ehud Olmert will meet US president George Bush today to lay out plans for a unilateral Israeli withdrawal from most of the West Bank.
The meeting comes as the Palestinian-controlled Gaza Strip threatens to degenerate into civil war, with a Jordanian diplomatic official shot dead yesterday during a one-hour gun battle between Fatah-run police and Hamas militants.
Mr Olmert is making a three-day trip to Washington to convince politicians and government officials to back his withdrawal plans, expressed in peace talks, which would see Israel dismantling some Jewish settlements but retaining significant sections of the West Bank.
The proposals fall short of Palestinian hopes, which would see Israel withdraw to the borders it held before taking the West Bank in the 1967 six-day war, and possibly accept the return of more than a million Palestinian refugees and their descendants.
In an interview in Israel's Haaretz newspaper today, the Palestinian prime minister, Ismail Haniyeh, said that even a full Israeli withdrawal would only result in a 'long-term cease-fire' from Hamas, rather than a formal peace treaty.
'If Israel withdraws to the 1967 borders, peace will prevail and we will implement a ceasefire for many years,' he told the paper. 'Our government is prepared to maintain a long-term cease-fire with Israel.'
Mr Haniyeh was elected as prime minister in January at the head of a parliament dominated by Islamist group Hamas, which refuses to recognise Israel or renounce violence.
However, the group has observed an uncertain ceasefire with Israel for over a year, holding out hope that involvement in the Palestinian government could moderate its position in favour of peace.
Officials say that Mr Olmert's visit to Washington is focused on gauging whether the US government would support his unilateral withdrawal plans.
The US has so far refused to give its blessing to the unilateral plans, saying that any solution to the Israeli-Palestinian issue needs to be agreed by both sides.
Mr Bush has previously accepted Israeli proposals to retain some West Bank settlements near Jerusalem, but only on condition that the deal is agreed by the Palestinian government.
But Israel says it has no Palestinian negotiating partner. Officials say they would only be prepared to 'go bilateral' if Palestinian president Mahmoud Abbas dismantles Palestinian terrorist organisations.
But this is an unlikely prospect, since Mr Abbas is already engaged in a power struggle with Hamas, which is listed as a terrorist group by the US, EU and Israel.
Following a meeting with secretary of state Condoleezza Rice yesterday, Mr Olmert will also meet defence secretary Donald Rumsfeld, vice president Dick Cheney and house speaker Dennis Hastert, and address a joint session of both chambers of Congress.
Tensions between Hamas and Mr Abbas have increased in the past week, following the establishment of a 3,000-strong Hamas security force in Gaza.
Eight people have been killed in fighting between Palestinian police loyal to Mr Abbas and the Hamas force since it was established last Wednesday, and yesterday a gun battle between the two sides outside the parliament building in Gaza left a Jordanian diplomatic official dead.
Mr Haniyeh this morning denied that the situation was spiralling out of control, ahead of a joint meeting of Palestinian factions designed to end the unrest.
'The term civil war does not exist in our dictionary,' he said. 'I assure our people that we can overcome these incidents.'
As president, Mr Abbas technically has authority within the Palestinian territories. But the armed strength of Hamas and the level of popular support for the group make his hold on power shaky.
The difficulty of cracking down on the group was illustrated today when Israeli troops arrested Hamas' West Bank military commander in a house just 200m from Mr Abbas' own home in Ramallah.
The Israeli army said that Ibrahim Hamed had masterminded attacks that killed 78 Israelis and wounded hundreds, and has headed Hamas' military wing since December 2003.
Adding to Mr Abbas' problems is a financial crisis threatening to drive the Palestinian Authority into bankruptcy.
Aid donors in the US and EU have suspended aid payments to the PA since the election of Hamas, because of regulations against the funding of terrorist groups.
Proposals are on the drawing board for diverting the funding so that it goes directly to Palestinians and bypasses Hamas officials, but in the meantime the PA faces a cash shortage.
Palestinian foreign minister Mahmoud Zahar today embarked on a tour of Asian countries to drum up emergency funding for the authority's 165,000 civil servants, whose salaries are central to the Palestinian economy. He will be visiting Iran, Indonesia, Malaysia, China and Sri Lanka on the trip.