Israel's leader Ehud Olmert has said his country and the Palestinians have never been so close to a peace agreement.

Nicolas Sarkozy hosted talks with Mr Olmert and the Palestinian leader Mahmoud Abbas, at the first meeting of the 43-nation Union for the Mediterranean - an initiative launched by the French president which was held at the Grand Palais in Paris.

Mr Olmert said the fact that everyone will be in the same room for the same meeting is in itself an historic event.

Mr Sarkozy said: "The goal of this summit for the Mediterranean, of this Union for the Mediterranean, is that we learn to love each other instead of continuing to hate each other and wage war."

Mr Olmert, keen to talk up peace prospects as he clings to office in the face of serious corruption allegations, told reporters: "It seems to me that we have never been as close to the possibility of reaching an accord as we are today."

The final summit communique, however, was issued after hours of wrangling over the wording on the Arab-Israeli conflict.

But, it voiced support for the Israeli-Palestinian peace process although omitted any direct mention of a two-state solution.

Syrian President Bashar al-Assad attended the opening conference and it was the first time Israeli and Syrian leaders were in the same room together.

The two countries recently began indirect peace talks with Turkish mediation. However, there was no handshake and Mr al-Assad appeared to go out of his way to avoid Mr Olmert, hiding his face behind his arm as he walked past where the Israeli leader was standing.

Mr Assad later said in a television interview that it would take between six months and two years to make peace with Israel if both sides were serious and engaged in direct talks.

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