By Adam Entous JERUSALEM, Sept 16 (Reuters) - Israeli Prime Minister Ehud Olmert sought on Sunday to lower expectations for a U.S.-led conference on Palestinian statehood, saying he wanted a joint declaration out of the gathering rather than a binding deal. "We are talking between us about a joint declaration that we hope we can formulate," Olmert told members of his government, referring to his discussions with Western-backed Palestinian President Mahmoud Abbas. "There is a difference between an 'agreement on principles' and a declaration which represents positions," Olmert was quoted as saying by an official. With U.S. Secretary of State Condoleezza Rice scheduled to return in the region this week, Olmert's comments highlighted the differences that remain two months before the conference is expected to convene in the Washington area. Abbas, who set up a West Bank-based government after his Fatah faction lost control of the Gaza Strip to Hamas Islamists in June, is seeking a more explicit "framework agreement". Such an accord, Abbas says, should have a timeline for implementation on the core issues of borders, Jerusalem and the fate of Palestinian refugees. Saeb Erekat, an aide to Abbas, said the label attached to a document agreed by both sides was not the paramount issue. "I don't care what you call it. I care about the substance. The most important thing is that we specify in a substantive way how to resolve all the fundamental issues," Erekat said in reference to Olmert's remarks. SCALED BACK After U.S. President George W. Bush first proposed convening the conference, Olmert's aides had talked of hammering out a broadbrush agreement on principles. Under Olmert's new approach, that could be scaled back even further to a joint statement, Israeli officials said. The change in Israel's language could make it more difficult for Washington to attract key Arab states to the conference. Saudi Arabia has conditioned its participation on making progress in "final-status" talks over a Palestinian state. Talks are scheduled to get under way this week between Israeli and Palestinian negotiating teams, and Rice was expected to press both sides to make tangible progress. The conference is expected to be held on Nov. 15 or soon thereafter. In the run-up to the gathering, Olmert has come under pressure from within his own centrist Kadima party and from other coalition partners to lower expectations for the meeting. It was unclear from Olmert's latest comments what he would be willing to include in a joint declaration and how it would be substantively different from an agreement on principles. Israeli officials said such a statement could include agreed "points" on some final-status issues, much like an agreement on principles. With Hamas in control of Gaza, it is unclear how Abbas would impose any deal on the Palestinian side. Olmert has also been weakened politically since last year's war in Lebanon, raising doubts over his ability to deliver any peace promises. (Additional reporting by Avida Landau)
