Israel's Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas met Monday in Jerusalem, shortly after U.S. Secretary of State Condoleezza Rice ended a two-day visit to the region, calling on Israel to do more to dismantle checkpoints and settlements in the occupied West Bank. VOA's Jim Teeple reports the talks could be affected by a new investigation into the conduct of the Israeli prime minister.

Prime Minister Olmert and President Abbas met just hours after Secretary Rice returned to Washington saying she had raised the issue of West Bank checkpoints and settlements in her talks with Israeli leaders. There are more than 500 such checkpoints in the West Bank. Israeli officials recently said they would remove 61 of the barriers, but U.N. officials say so far only 41, mostly insignificant barriers had been taken down.

Mark Regev a spokesman for the Israeli prime minister says Israel is ready to make "tangible changes in the West Bank" when it comes to reducing checkpoints.

"We are willing to take down roadblocks. There are real security threats out there on the West Bank. Nevertheless, we are willing to take a calculated risk, not an irrational irresponsible risk, but a calculated risk, and we are working closely with the Palestinians, with the Americans and with other international actors to see what can be done to create greater movement for Palestinians," he said.

Speaking as she returned to the United States, Secretary Rice said she believed both sides are trying to get a peace agreement by the end of the year aimed at resolving the core issues that divide them; borders, refugees, and the status of Jerusalem. Secretary Rice will return to Israel next week, along with President Bush to mark Israel's 60th anniversary. 

Few details emerged from the talks between Mr. Olmert and Mr. Abbas, but news reports say the talks are focused on the issue of borders, and that negotiators are making progress. Mark Regev says the talks are perhaps the most serious ever held between the two sides. Palestinian negotiator Saeb Erekat said the same at a news conference in Ramallah.

Erekat says the talks are deep and serious and that the two leaders reviewed proposals submitted by their negotiators that dealt with "core issues" such as future borders of a Palestinian state.

Meanwhile the talks are taking place as Israeli police have begun a new criminal investigation into allegations of misconduct by Mr. Olmert. Mark Regev says however the prime minister remains focused on his job.

"The prime minister is totally focused on his agenda that is trying to reach a historic agreement with the Palestinians by the end of this year," added Regev.

A statement from the prime minister's office says he was questioned about funds raised by a U.S. citizen that were used for party elections several years ago. Israeli officials say a gag order placed on the case could be lifted as early as Tuesday. Mr. Olmert has dismissed the allegations and says he has no plans to leave office. Israeli media reports say the investigation appears to be more serious than previous ones, putting at risk the prime minister's political future and potentially the future of the Mideast peace process.