In Blow to Bush, Olmert Rules Out Deal in 2008

Ehud Olmert said today it is "unrealistic" to expect a comprehensive Israeli-Palestinian peace agreement by the end of the year. The Israeli PM and Palestian Authority president Mahmoud Abbas pledged last year to make a deal by the end of 2008, and their inability to do so is a blow to President Bush's hopes for the situation to be resolved before he leaves office, reports the Financial Times.

The major sticking point is the future of Jerusalem, which hasn't even come up in negotiations yet. "There is no practical chance of reaching an overall understanding on Jerusalem," Olmert reportedly said at a parliament meeting. The Palestians want the eastern half of the city, which has been under Israeli control since 1967, as the capital of their future state.