Palestinian president Mahmud Abbas, left, and Israeli PM Ehud Olmert shake hands during a meeting in Jerusalem, 06 Aug 2008

Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas are set to talk again in the hopes of moving closer to a peace deal.

Palestinian negotiator Saeb Erekat said Friday, the two leaders will meet Sunday in Jerusalem.

A spokesman for Mr. Olmert confirmed the meeting.

The two leaders last met August 6, when Israel agreed to release Palestinian prisoners in a sign of goodwill. Israel released almost 200 prisoners Monday.

U.S. Secretary of State Condoleezza Rice met with Israeli and Palestinian officials earlier this week, and said the parties have a "good chance" of signing a deal by the time U.S. President George Bush leaves office in January.

During a visit to Lebanon Thursday, President Abbas told reporters he has spoken to Israeli negotiators about the plight of Palestinian refugees in Lebanon.

He said all Palestinian refugees should have the right to return home.

Mr. Abbas also said he was against the permanent resettlement of refugees in Lebanon.

Officials say there are about 400,000 Palestinian refugees living in a dozen camps in Lebanon.

Meanwhile, Israeli officials say Prime Minister Olmert has been questioned for the seventh time Friday as part of an ongoing corruption investigation.

Officials are looking into allegations Mr. Olmert accepted illegal funds from an American businessman and double-billed the government for travel expenses.

Mr. Olmert denies wrongdoing, but announced last month that he will resign once his ruling Kadima Party picks a new leader on September 17.

Some information for this report was provided by AFP, AP and Reuters.