The Palestinian leader Mahmoud Abbas and Ariel Sharon, the Israeli Prime Minister, today accepted an invitation to meet at a peace summit in Egypt next week.

If successful, the meeting could clear the path to full-scale negotiations on a political settlement of the Arab-Israeli conflict.

The summit at the Red Sea resort of Sharm el-Sheikh next Tuesday will be the highest-level meeting between the two sides since the second Palestinian uprising began in September 2000.

The summit was proposed today by Egypt's intelligence chief, Omar Suleiman, during a hastily arranged meeting with Mr Sharon. Mr Suleiman yesterday held talks in Cairo with the heads of Islamic Jihad and Hamas, the two main Palestinian militant groups.

It will be hosted by President Murbarak of Egypt and Jordan's King Abdullah will also attend. Jordan and Egypt are the only two Arab nations to have signed peace deals with Israel and have acted as intermediaries in the peace process.

Ahmed Qureia, the Palestinian Prime Minister, said he hoped that Condoleezza Rice, the newly appointed US Secretary of State, would also attend. Ms Rice is due to conclude talks in Israel and the West Bank the previous day.

"This is an important summit and we hope that after the summit that there will a statement from all the leaders to continue the peace process," Mr Qureia said.

Mr Qureia said that the Palestinians were looking to the summit to produce a mutual cease-fire, a halt to Israel’s targeted killings of militants and the release of Palestinian prisoners.

Israeli and Palestinian officials have been meeting to discuss the agenda of a possible summit. Disagreements still remain over the scope of a Palestinian prisoner release, the fate of Palestinian fugitives and a West Bank troop redeployment.

"We are making very important efforts to secure a ceasefire at the same time between us and the Israelis," Mr Qureia said. "We will respect whatever we are obliged to do in any agreement and we hope that this summit will be the beginning of the implementation of the roadmap."

The last time the two leaders met was alongside President Bush in Washington in June 2003 at the launch of the "roadmap", a peace blueprint outlining an independent Palestinian state alongside a secure Israel. At that point Mr Abbas was himself prime minister and considered a viable negotiating partner instead of the veteran Palestinian leader Yassir Arafat, with whom Mr Sharon refused to negotiate.

Mr Abbas was elected last month to succeed Mr Arafat, who died in November. SInce he took power he has made rapid progress on reining in militant groups, and organising a ceasefire that will allow real negotiations to get started. There has so far been no formal declaration of a truce, although thousands of Palestinian security guards have deployed around Gaza to prevent attacks from inside the territory against Jewish settlements.

If the summit goes ahead, the trip to Egypt would mark a major achievement for Mr Sharon, whom Mr Mubarak has steadfastly refused to meet since the hardline Israeli politician became prime minister in 2001. Israeli radio stations described the invitation to Egypt as "historic."

Amos Gilad, a senior Israeli Defence Ministry official, said today that the two sides plan to set up a panel to take some Palestinian fugitives off Israel’s wanted list, signaling progress toward easing a major source of contention. Israel has vigorously pursued fugitives during four years of fighting, killing or arresting hundreds, and is chasing several hundred more.

Mr Gilad told Israel’s Army Radio that Cabinet ministers will probably approve the panel later this week. He said that Israel would not go after Palestinian fugitives who hand in their weapons and sign a written agreement pledging not to carry out attacks against Israeli targets. Any fugitive who violates the pledge would again become a target. The Palestinians seek a blanket amnesty for all fugitives.

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