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Jerusalem – Israel agreed Sunday to begin releasing hundreds of millions of dollars in frozen tax funds to Palestinian President Mahmoud Abbas, a gesture to bolster the moderate Palestinian leader in his standoff against the Islamic militant group Hamas.

The decision came a day before Prime Minister Ehud Ol mert heads to Egypt for a high- profile summit with Abbas, President Hosni Mubarak of Egypt and Jordanian King Abdullah II.

The gathering today is meant to give Abbas a high-profile display of support against Hamas, which violently seized control of the Gaza Strip in a bloody rout of Abbas’ Fatah movement earlier this month, but Olmert cautioned against high expectations for the summit.

“We have an interest in having this meeting, but I don’t want anyone to think we’re on the brink of a dramatic breakthrough,” Olmert told his Cabinet, according to a meeting participant.

Abbas, however, said he received U.S. and Israeli assurances that Israel was ready to make progress at the summit. The Palestinian president, who met with King Abdullah II in Jordan, said he would ask Israel to free Palestinian prisoners, in addition to easing restrictions at crossing points and releasing the tax money, the official Jordanian news agency Petra reported.

Ismail Haniyeh, the deposed Palestinian prime minister, dismissed the summit as a “mirage,” saying resistance was the only hope for Palestinians.

“The Americans won’t give anything. Israel won’t give us anything. Our land, our nation will not come back to us except with steadfastness and resistance,” a code word for attacks against Israel, he said in Gaza.

The Palestinian infighting has left the Palestinians with two governments – Abbas’ new Cabinet in the West Bank and the Hamas rulers in Gaza. Israel and moderate Arab leaders have joined to support Abbas and isolate Hamas, a radical group pledged to Israel’s destruction.

Israel has withheld some $550 million of Palestinian tax money since Hamas swept Palestinian parliamentary elections in January 2006, saying it feared Hamas would use the money to finance terrorist attacks. Abbas kicked Hamas out of the Palestinian government after the group took Gaza, clearing the way for a transfer of the money.

The Hamas takeover of Gaza complicates the case of Gilad Shalit, an Israeli soldier who has been held captive by Hamas- linked militants for a year.

On Sunday, hundreds of protesters gathered outside Israel’s parliament to mark the one-year anniversary of Shalit’s capture.

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