SHARM EL-SHEIKH (Egypt), June 25: Israeli Prime Minister Ehud Olmert said on Monday he intended to free 250 Palestinian prisoners from Israeli jails in a goodwill gesture to President Mahmoud Abbas, leader of the moderate Fatah faction.

The two leaders held talks in the Egyptian Red Sea resort of Sharm el-Sheikh, their first meeting since Islamist Hamas militants routed Abbas's secular forces in Gaza this month to split the enclave from his larger stronghold in the West Bank.

Olmert told a news conference with Palestinian, Egyptian and Jordanian leaders he would work with “moderates” like Abbas against “terrorists” -- a clear reference to Hamas militants — to secure peace in the Middle East.

“As a gesture of goodwill towards the Palestinians, I today announced my intention to release approximately 250 prisoners who are members of Fatah who do not have blood on their hands, with their commitment not to involve themselves again in terror,” said Olmert.

“I'm optimistic that, especially in these turbulent days ...an opportunity has been created to seriously move forward with the regional peace process,” he said. “I don't plan to let this opportunity slip away.”

Hamas has accused Abbas of giving in to “Zionist blackmail”.

Hours earlier, Hamas militants in Gaza posted an audio tape of a captive Israeli soldier on the Internet. Sergeant Gilad Shalit was heard asking for medical treatment and urging Israel to free Palestinian prisoners.

A spokesman for Hamas militants said it was up to Israel to make a deal to free Shalit, a 20-year-old conscript.

He was seized a year ago to the day by militants who tunnelled up to his border post and killed two other soldiers. The release of the tape showed obstacles to a settlement with 1.5 million Palestinians, one in three of the new state's potential citizens, now living under Hamas rule.

“The only beneficiary of these summits is the Zionist enemy,” said Mushir al-Masri, a member of the Hamas majority in the now moribund Palestinian parliament.

“It is surprising that at a time when Abbas has shut the door on talks with Hamas he is running and begging for a meeting with Olmert.”—Reuters