"I invite the 22 leaders of the Arab states who are interested in making peace with Israel to gather at any location for talks," Olmert told journalists when asked about a Saudi land-for-peace initiative.

"If they want to invite me I am ready to meet them anywhere."

"The Arab peace initiative is an interesting idea," he said. "We are ready to sit and listen to it. I believe we will not accept all they say, and they will not accept all we say."

The Jordanian leader called on Olmert to set a timetable for making a deal with the Palestinians, urging him to accept the Saudi initiative, which offers Israel recognition in return for territorial concessions.

Olmert reiterated Israel's readiness to discuss the proposed initiative, in line with past statements which welcomed the plan as a good starting point for talks, but noted that some changes would have to be made.

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Abdullah expressed concern that Israel was planning new settlements in the West Bank or to expand existing ones, but Olmert called such reports baseless.

"Israel is not building new settlements nor is it expanding the established settlements beyond their existing borders," said Olmert.

The two also discussed the financial crisis in the Palestinian Authority and Abdullah urged Olmert to lift the economic blockade. Olmert said Israel would consider unfreezing the funds if it could be assured they would be used for humanitarian purposes.