By Adam Entous JERUSALEM, June 26 (Reuters) - Middle East mediators held talks on Tuesday that could clear the way for the appointment of Tony Blair as their envoy to try to revive peace prospects after Hamas seized control of the Gaza Strip. Diplomats close to the so-called Quartet powers -- the United States, the European Union, Russia and the United Nations -- said Blair, who steps down as Britain's prime minister on Wednesday, was likely to be named to the top peacemaking position soon. Representatives from the Quartet, meeting at the U.S. Consulate in Jerusalem, were expected to hammer out details about the role the new envoy would play as Washington pushes Israel to commit to talks on the parameters of a future Palestinian state. Washington has confirmed that the Quartet was discussing the appointment of an envoy to help Western-backed Palestinian President Mahmoud Abbas of Fatah build up the institutions of a future state and carry out political and economic reforms. Hamas official Sami Abu Zuhri said that "the experience of our people with Blair was bad", though he offered no specifics. Blair's appointment as Quartet envoy "may even make things worse", he added. Some European diplomats have questioned Blair's ability to garner broad Palestinian and Arab public support because of his leading role in the Iraq war and his close relationship with U.S. President George W. Bush. Many Arabs see the Bush administration as biased against the Palestinians. Blair, who steps down after 10 years in power, has frequently urged Bush to take a more assertive role in trying to settle the Israeli-Palestinian conflict. Israeli Prime Minister Ehud Olmert supports Blair taking on an expanded role in the region after he steps down as prime minister, aides said. PRISONER RELEASE Bush administration officials first floated the idea of appointing Blair to the envoy post in private meetings earlier this year, long before Hamas seized control of the Gaza Strip more than a week ago, Western diplomats said. Abbas responded to Gaza's takeover by sacking the Hamas-led government and forming an emergency cabinet in the West Bank. That has divided the Palestinian territories into two separate fiefdoms -- a Hamas-controlled Gaza and a larger, Fatah-dominated West Bank. As part of a strategy to counter Hamas, Israel and the United States want to isolate the Islamists in the Gaza Strip while bolstering the emergency government set up by Abbas in the West Bank. Olmert has so far promised to free hundreds of millions of dollars in Palestinian tax funds to Abbas and to release 250 Fatah prisoners from Israeli jails. Under U.S. pressure, Abbas and Olmert, who met in Egypt on Monday, also plan to accelerate talks aimed at laying the groundwork for a two-state solution to the conflict. Hamas trounced Fatah in parliamentary elections 18 months ago but its government was shunned by Israel and Western powers for refusing to renounce violence and recognise Israel. Hamas leaders have offered a long-term truce with Israel in return for a viable Palestinian state in the occupied West Bank and the Gaza Strip. But the Islamist group continues to say it will not formally recognise Israel and its 1988 founding charter calls for the destruction of the Jewish state. The Quartet's previous envoy, former World Bank president James Wolfensohn, focused largely on economic issues. He resigned in frustration, in large part over Israel's unwillingness to comply with U.S.-brokered agreements.
