Tel Aviv - The turmoil over his forced resignation is still fresh, yet interim Israeli Prime Minister Ehud Olmert continues to pursue great plans.

During his remaining weeks, or months, in office at the head of a caretaker government, the 62-year-old insists on continuing his efforts to reach a peace deal with the Palestinians.

"Israel and the Palestinians have never been closer to an agreement," says his spokesman, Mark Regev. It is still possible to meet the end-of-year deadline, he surprises sceptics.

The parties, Regev says, are "close" to drawing the final borders between Israel and the future Palestinian state. An agreement on the security arrangements between the two states is "doable."

And with some "flexibility and creativity," a solution can also be found for the more than 4.4 million Palestinian refugees living in camps in the West Bank, Gaza and neighbouring Arab countries.

"Jerusalem is the most sensitive and difficult issue," he says. Israel therefore wants to deal with Jerusalem in a "separate mechanism."

Olmert's optimism, as expressed through Regev, is surprising, even more so after Palestinian President Mahmoud Abbas wrote in The Wall Street Journal just three days ago that a partial peace agreement - one that excludes a settlement on Jerusalem - is "not the way forward."

Jerusalem should be the shared capital of both states, with Palestinian sovereignty over the east, and Israeli over the west, he wrote.

So is Olmert just looking to enter the history books as the Israeli prime minister who went further, and came closer, to reaching a peace deal with the Palestinians than anyone before him?

Or are the Israelis perhaps preparing the ground for blaming the Palestinians if the negotiations fail, as was the case with the July 2000 Camp David summit, which fell apart in deadlock and paved the way for the outbreak of the second Palestinian uprising?

Israelis have said the Palestinians, as the underdog, have an interest in presenting the half-empty cup. Regev, for his part, explains his positive spin by speaking of a "triangle dynamic between all three major parties of the Annapolis process."

All three players - Israelis, Palestinians and the United States - are working according to a political timetable. Olmert's transitional government will only survive until Foreign Minister Tzipi Livni, the new head of Israel's ruling party, forms a new coalition.

Abbas' term as Palestinian president is also running out. And whether John McCain or Barack Obama wins the US elections in November, by the time the US Senate has confirmed the entire new governmental team, months will have passed. Until then, possibly next summer, the new secretary of state will not be able to begin his or her mediation mission in the Middle East.

As for Abbas, his term in office officially ends on January 9, but aides have said he may seek to prolong it by one year to allow presidential and parliamentary elections to take place simultaneously - as is called for in the new Palestinian election law of June 2005 - in January 2010.

His internal rival, the radical Islamic Hamas movement ruling Gaza, however rejects this and has threatened to declare Abbas' continued hold on power "unconstitutional" and to launch demonstrations to chase him out of office. Egypt is planning to mediate between the two parties, which are scheduled to hold talks in Cairo during the autumn.

As for Olmert, he has until Livni forms a new government by early November. She has 42 days to do so or, if she fails, until Israel elects a new parliament by March 2009.

Until then, Olmert will not have to vacate his office even if the suspicions of corruption against him materialize into an indictment.

Under Israeli law, only a sitting premier can take - or be forced to take - a leave of absence for up to 100 days, after which he or she must resign. But Olmert has already stepped down and cannot resign a second time. He is therefore virtually untouchable until the new cabinet is formed or new elections are held.

In light of the uncertainties in the US, Israel and the Palestinian areas, Regev urges: "Let's do it now. If it is possible to get an agreement, let's try."

Olmert, in any case, is determined to give it his all. "As long as Olmert is prime minister he will endeavour to reach an agreement with the Palestinians," stresses Regev.

What are Olmert's plans as a retiree from politics? His spokesman does not know. "One would expect that for the first few months he'll enjoy life," he says. That means going to the beach or watching his favourite football team, Beitar Jerusalem.

Being the prime minister of Israel is a "high-pressure" task, and one of the world's "most difficult jobs," he points out. The Olmert aide would not rule out, or confirm, a political comeback. (dpa)