Israel today ruled out talks "at this stage" over the boundaries of a future Palestinian state in a rebuff to Palestinian President Mahmoud Abbas.
"Israel has openly stated that we're willing to talk about issues of 'political horizon' and about how to achieve the vision of two states for two peoples," said a spokeswoman for Israeli Prime Minister Ehud Olmert.
"But we have been very clear that we are not willing to discuss at this stage the three core issues of borders, refugees and Jerusalem," she added.
Israel has narrowly defined "political horizon" as talks about the legal, economic and governmental structures of a future Palestinian state.
President George W. Bush called for a Middle East peace conference bringing together Israel, the Palestinians and some Arab neighbours.
Under pressure from Arab allies to break years of stalemate, Mr Bush said the conference - meant to pave the way to a Palestinian state alongside Israel - would take place this autumn and be led by Secretary of State Condoleezza Rice.
But he specified no date, location or which neighbouring nations would be invited.
US President George W Bush
Mr Bush said yesterday that "with the proper foundation we can soon begin serious negotiations toward the creation of a Palestinian state", singling out talks on borders as a near-term priority.
A Fatah spokesman said Mr Abbas was prepared to immediately start final status talks.
Western diplomats and analysts said Mr Bush appeared to be outlining a new strategy of staged talks under which borders - a final status issue - would be delineated before the parties try to settle the two other core questions of Jerusalem and Palestinian refugees.
During talks in Jerusalem yesterday, Israeli Prime Minister Ehud Olmert told President Mahmoud Abbas that Israel would start freeing 250 Palestinian prisoners this week. Prisoner releases have bolstered confidence in the past.
Israel has described its decisions to free 250 low-security Palestinian prisoners, mostly from Mr Abbas's secular Fatah faction, and to suspend missions against 180 Fatah gunmen as goodwill gestures in support of the new government.
Former British prime minister Tony Blair is today beginning a round of talks as he prepares for his first major meeting as envoy for the "quartet" of Middle East peace mediators. He will be in Brussels today to meet key European Union figures.