BY OREN YANIV
Posted Monday, June 18th 2007, 4:00 AM
Israeli Prime Minister Ehud Olmert yesterday vowed to step up peace talks with moderate Palestinian leaders even as he denounced the radical Hamas takeover of the Gaza Strip.
Sounding an upbeat note, Olmert told Jewish leaders in the city that the violent split between Hamas and the more pragmatic Fatah movement could amount to a historic "opportunity for the future."
"With terrorists you fight, with the others you make peace," Olmert told 150 members of the Conference of Presidents of Major American Jewish Organizations.
"There is a real chance for a different kind of life for them and ourselves," he added.
Olmert said Israelis were horrified - but not surprised - by the orgy of violence that Hamas unleashed last week against its Fatah rivals in Gaza.
"At the end, it was inevitable," he said. "Hamas will not be part of any peaceful solution."
Olmert earlier met with UN Secretary General Ban Ki-moon and plans to meet with President Bush tomorrow to discuss the crisis in the Palestinian territories.
The Israeli leader predicted the brutal power struggle would push Fatah and Palestinian President Mahmoud Abbas into constructive talks with the Jewish state.
He pledged to release some $300 million in frozen tax revenue to Abbas and to try to improve movement for Palestinians in the Fatah-controlled West Bank.
"Our government will consider the new Palestinian government, free of Hamas, as a genuine partner," he said.
The American Jewish leaders greeted Olmert with a standing ovation and backed his efforts to take advantage of the Palestinian split to forge peace.
"Your optimism is contagious," said Chairwoman June Walker.
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