"Understandings and agreements regarding highly important matters have been achieved, though some issues are still outstanding," Olmert said. The report said Olmert, under police investigation for receiving hundreds of thousands of dollars in cash from supporters in the United States, has sought to accelerate the negotiations and reach agreement by the end of the summer of 2008. The prime minister then hopes to obtain parliamentary approval for any Palestinian state around November. But Israel and the PA continue to disagree on the borders of a Palestinian state and whether any accord should include the Palestinian refugee demand to return to their homes in what is now the Jewish state. Benn, diplomatic reporter for the Israeli daily Haaretz and regarded as one of the most authoritative journalists in the country, said the PA has demanded 96.5 percent of the West Bank, with the remainder compensated from land within Israel and an internationally-recognized corridor with the Gaza Strip. Israel has sought to keep up to 10 percent of the West Bank. "At its core will be the future borders between Israel and the Palestinian state and the delineation of security arrangements between the two countries," the report said. "The question of Jerusalem is to be postponed, and the two sides are still at odds over the issue of the refugees." The report said once an agreement of principles is signed, the Israeli government would arrange for the eviction of Jews who live in the proposed boundaries of the Palestinian state. "The coming weeks will be decisive, and by the end of the summer it will be clear whether an agreement has been reached or if the Annapolis process will join the list of the failures that preceded it," the report said.

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