The Israeli and the Palestinian leaders on Tuesday held their second face-to-face talks in a month, which an Israeli government spokesman said have touched on "fundamental issues."
David Baker, a spokesman for the Israeli Prime Minister Ehud Olmert said that Olmert and the Palestinian National Authority ( PNA) Chairman Abbas talked about "fundamental issues that were necessary to bring about the establishment of two states for people."
Baker made the remarks shortly after Olmert-Abbas meeting ended in Olmert's residence in Jerusalem after nearly three hours discussion.
The two leaders also discussed the security and economic cooperation between Israel and the PNA as well as ways to prevent weapon smuggling from Egypt to the Gaza Strip, which was taken over by Hamas, or the Islamic Resistance Movement, in June, said Baker.
Both leaders have vowed to strengthen Abbas' security forces to enable the PNA to effectively control their territories in the future, he added.
Abbas, for his part, raised issues of releasing Palestinian prisoners jailed in Israel and dismantling the roadblocks in the West Bank, he said, adding that Israel is considering those issues.
In addition, the two sides have agreed to launch a join economical council and a ceremony will be held in Tel Aviv in October to celebrate the establishment of the council, Baker said.
Olmert was quoted as saying that he would instruct his ministers to renew the cooperation with their Palestinian counterparts in a professional level.
The prime minister also thanked Abbas for PNA security forces' rescue operation for an Israeli army officer who accidentally entered the West Bank city of Jenin on Monday, according to Baker.
Under tight security, Abbas' motorcade arrived at Olmert's residence shortly after 12:00 (0900 GMT) on Tuesday for the summit.
It is the second face-to-face meeting of the two leaders during this month. They last met in the West Bank city of Jericho on Aug. 6.
Olmert and Abbas are expected to meet again before Rosh Hashanah, the Jewish new year holiday which will fall on Sept.13.
Ahead of Olmert-Abbas meeting, Israeli Foreign Minister Tzipi Livni and Palestinian Prime Minister Salam Fayyad met on Monday evening.
According to Israeli media, the two agreed to promote economic, social and environmental cooperation between Israel and the PNA.
The cooperation would be realized in meetings between parallel committees and organizations as well as direct contact between municipality leaders on joint projects.
Meanwhile, other Israeli media also reported that the Palestinian Hamas had condemned the Olmert-Abbas meeting, calling it another attempt to isolate its movement.
Hamas took control of Gaza in mid-June, after defeating its rival Fatah, that led by Abbas, in days of bloody fighting.
"The meeting will end in complete failure. Such meetings can never achieve anything as long as the Israeli occupation continues to deny the rights of our people and continues its aggression against them," Hamas official Sami Abu Zuhri was quoted as saying.
Prior to the meeting, Israeli media predicted that Tuesday's meeting would aim at defining an agenda for an upcoming international summit on Middle East peace, which is sponsored by the U.S. and supposed to take place in November.
Israeli daily Ha'aretz quoted a senior Israeli government official as saying on Monday that the framework of discussions between Israel and the PNA will be expanded to include the establishment of negotiating teams for each side, which will discuss the agreement of principles to be prepared ahead of the peace summit.
Ha'aretz said that the main development in the talks so far has been Olmert's acceding to the inclusion in the agreement of principles of the "core issues" - Jerusalem, permanent borders and refugees.
This represents a reversal of his earlier position that raising these issues might lead to a breakdown in the negotiations, said the paper.
The government official told Ha'aretz that Olmert has been persuaded to present the Palestinians with a political horizon, " so that Abbas will not lose the support of the Palestinian masses. "