JERUSALEM, Oct 19 (Reuters) - For U.S. President George W. Bush, Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas, holding a conference on Palestinian statehood amounts to a collective gamble. Short of the declared goal of laying the foundations for a Palestinian state, here's what the leaders hope to achieve: BUSH: The Annapolis, Maryland conference, expected to convene in late November, comes at least in part in response to pressure from Arab allies for the Bush administration to make a last-ditch effort to address the Israeli-Palestinian conflict. By doing so, Bush could shore up Arab support for his policies in the region, particularly in isolating Iran and its interests in the area, including Hamas Islamists who seized control of the Gaza Strip in June. Brokering even a partial agreement on a future Palestinian state could also bolster Bush's legacy. If the effort fails, Bush could at least make the case that his administration made an effort, however late in his term. OLMERT: Battered politically by last year's war in Lebanon and a string of corruption scandals, Olmert is in the midst of a battle for political survival. He came to power in early 2006 after party ally Ariel Sharon was left in a coma by a stroke. Olmert's two biggest rivals, right-wing Likud party leader Benjamin Netanyahu and left-leaning Labour boss Ehud Barak, are already busy positioning themselves for eventual elections that could be called if Olmert and the U.S. peace process falter. The U.S.-sponsored conference on Palestinian statehood, which Olmert says Israel wants the Palestinians to achieve under a peace deal that would afford Israel recognition and security, must be viewed in that context. Following Hamas's takeover of the Gaza Strip in June, the Israeli leader acceded to U.S. pressure to expand the scope of talks with Abbas to include "final-status" issues, including borders, the future of Jerusalem and Palestinian refugees. But Olmert's room to manoeuvre may be limited by the constraints of his coalition government. Even preliminary talk of dividing Jerusalem could spark a revolt by right-wing coalition partners, ushering in new elections that would put any peace moves on hold for the remainder of Bush's term. ABBAS: Like Olmert, the conference and its aftermath could make or break Abbas. He succeeded to power after the death of Yasser Arafat in 2004 but his Fatah faction then lost a parliamentary election to Hamas Islamists in 2006 and then lost control of the Gaza Strip in fighting with Hamas in June this year. At minimum, Abbas needs to show tangible progress towards statehood to fend off political challenges, both from Hamas and within his own faction. No matter what the outcome, Hamas will try to portray the conference as a failure. Abbas is already under pressure from Olmert and U.S. Secretary of State Condoleezza Rice to scale back expectations for a joint document that will be presented at the conference. Israel has also rebuffed Abbas's call for a detailed timeline for carrying out formal negotiations on a Palestinian state, though diplomats say Washington is considering holding another major gathering in six months. If the effort collapses, violence could break out. Abbas could also try to cut another power-sharing deal with Hamas. That would at least temporarily bring any dialogue to an end.
