Ramallah- French President Nicolas Sarkozy is to visit the Palestinian territories and Israel on Sunday and meet leaders there.

Sarkozy is scheduled to meet Palestinian President Mahmoud Abbas in Bethlehem after meeting Israeli President Shimon Peres and Prime Minister Ehud Olmert, Palestinian sources said.

The visit to the Palestinian territories will be Sarkozy's first as president. He will be accompanied by his wife.

Israeli leaders are optimistic that the visit will boost ties between the two countries.

The French president is expected to invite Israel and the Palestinian Authority to participate in the Euro-Mediterranean summit to be held in Paris next month.

Sarkozy and Abbas will also inaugurate a Palestinian industrial zone in Bethlehem. The project is expected to provide between 1,500 - and 2,000 jobs. (dpa)