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''I hold out my hand in peace to our Palestinian neighbors in the hope that it won't be returned empty,'' Olmert said. Directly addressing the Palestinians in some of his most conciliatory remarks since winning election in March, Olmert described Israel as willing to make far-reaching concessions if the Palestinians choose peace. ''We, the state of Israel, will agree to the evacuation of many territories and the settlements that we built there. This is extremely difficult for us, like the splitting of the Red Sea. We will do it for real peace,'' he said. He said that if the Palestinians establish a new government committed to carrying out the U.S.-backed ''road map'' peace plan and securing the release of a captured Israeli soldier, then he would call for an immediate meeting with Abbas ''to have a real, open, honest, serious dialogue between us.'' Olmert said that Israel planned to release ''many Palestinian prisoners,'' including those serving long sentences, as a trust-building measure after Palestinian militants freed the captured soldier alive and healthy. Israel would also ease the checkpoints across the West Bank, improve border terminals in Gaza, release the frozen money to the Palestinians and help develop a plan to rehabilitate their crippled economy, he said.

The Palestinians (and Hamas no less) responded by rocket attacks. Yet the Israel critics will call Israel war-mongers that won't accept peace.