When the Palestinian state is set up, and receiving billions of dollars in aid, and all the politicians have taken their bows and pronounced peace in our time, what will happen when the killing continues? Olmert hopes talks can lead to Palestinian state.

JERICHO, West Bank (Reuters) - Israeli Prime Minister Ehud Olmert met Palestinian President Mahmoud Abbas in the West Bank on Monday and voiced hope that their talks would soon lead to negotiations on the creation of a Palestinian state.

After months of resistance, Olmert agreed to expand the scope of discussions with Abbas to include “fundamental issues” that are key to Palestinian statehood and ending the conflict, U.S. and Palestinian officials said.

But Israeli officials balked at describing the session as an attempt to address so-called final-status issues such as borders and the future of Jerusalem and Palestinian refugees, saying the two leaders would seek instead an agreement on “principles.”

“I came here in order to discuss with you the fundamental issues outstanding between Israel and the Palestinian Authority, hoping that this will lead us soon into negotiations about the creation of a Palestinian state,” Olmert said, with Abbas standing at his side, at the start of their talks in Jericho.