JERUSALEM, July 28: Israeli Prime Minister Ehud Olmert said on Monday that Israel and the Palestinians will not be able to agree this year on a peace deal that includes the crucial issue of Jerusalem.

“I don’t believe that we can reach an understanding that will include Jerusalem by the end of the year,” Olmert told parliament’s powerful foreign affairs and defence committee, according to a senior official.

He expressed optimism that the two sides could bridge their differences on other core issues in the decades-old conflict.

But he seemed to rule out a comprehensive deal by year-end, despite a commitment made by the two sides at a conference hosted by US President George Bush in Annapolis, Maryland last November that revived peace talks.

“There is no practical possibility to reach an overall understanding on the issue of Jerusalem at this time,” Olmert said.

“But there is an intention to create a mechanism that will continue to deal with the issue for a much longer period until we reach understandings that we can live with.”

The Palestinians slammed Olmert’s remarks, insisting they would never agree to a deal that did not include Jerusalem.

“Jerusalem is a red line with respect to the Palestinian Authority and the Palestinian people and we cannot retreat one inch from it,” said Nabil Abu Rudeina, a spokesman for president Mahmud Abbas, by phone from Cairo.—AFP