(Adds Olmert comments on Iran in paragraphs 11-12) By Jeffrey Heller JERUSALEM, April 1 (Reuters) - Israeli Prime Minister Ehud Olmert responded on Sunday to a revived Arab land-for-peace plan by inviting Arab leaders to meet him for a regional conference. Olmert's remarks, during a news conference with visiting German Chancellor Angela Merkel, appeared to be a new sign of Israeli willingness to pursue a broad dialogue with the Arab world while peacemaking with the Palestinians remains stalled. "I invite for a meeting all the heads of Arab states, including, of course, the king of Saudi Arabia -- who I see as a very important leader -- to hold talks with us," Olmert said. Olmert also said that "if the Saudi king initiates a meeting of moderate (Arab leaders) and invites me and the chairman of the Palestinian Authority, I would be happy to come and voice our views". Diplomats said earlier the United States and Egypt have been urging Israel to agree to begin talks quickly with a committee of Arab states on how to move the peace process forward. Several Arab League countries would talk "formally and publicly as a collective" with Israel, a senior diplomat said of the U.S.-Egyptian proposal, calling it unprecedented in its potential scope. At a summit last week in Riyadh, Arab leaders revived a 5-year-old peace plan initially mooted by Saudi Arabia. The proposal offers Israel normal ties with Arab countries in return for a full withdrawal from land it seized in the 1967 Middle East war, creation of a Palestinian state and a "just solution" for Palestinian refugees. Olmert has said he saw positive points in the proposal. But Israel, citing demographic and security concerns, opposes giving Palestinian refugees a right of return to their former homes in what is now the Jewish state. It also wants to hold on to major settlement blocs in the occupied West Bank. IRAN Turning to international tensions with Iran, Olmert expanded on comments Israel's military intelligence chief made to the cabinet earlier in the day that Iran was making defensive preparations for a feared U.S. attack this summer. Olmert said Israel "knew of no such plan" for a U.S. offensive, and nor was the Israeli military preparing any offensive of its own against Iran to halt the Islamic republic's nuclear programme. At the news conference with Merkel, Olmert said "moderate Arab states led by Saudi Arabia" were seeking a more active role in efforts to achieve Israeli-Palestinian peace. "I think the readiness to accept Israel as a fact and to debate the terms of a future solution is a step that I cannot help but appreciate," Olmert said. With Israeli-Palestinian talks on a final settlement frozen for the past six years, the diplomatic focus has been shifting towards greater involvement by what Israel sees as a coalition of moderate Arab states that includes Saudi Arabia and Egypt. The formation last month of a Palestinian unity government by moderate President Mahmoud Abbas and Hamas Islamists who refuse to recognise Israel has dimmed prospects for progress on a bilateral track. At the urging of U.S. Secretary of State Condoleezza Rice, who visited the region last week, Olmert agreed to hold biweekly meetings with Abbas. But Olmert, citing Abbas's power-sharing partnership with Hamas and the continued captivity of an Israeli soldier seized by Gaza militants last June, has said no real progress towards statehood could be made. (Additional reporting by Adam Entous)
