Prime Minister Ehud Olmert and Palestinian Authority Chairman and Fatah leader Mahmoud Abbas met in Jerusalem Sunday afternoon as Israelis watched closely to see if the two would try to negotiate the division of the capital.

Olmert's Kadima party will elect his replacement on September 17, leaving little more than two more weeks for the PA to decide whether it will accept his proposal for a final status deal based on his proposal for a "shelf agreement" that would leave the issue of Jerusalem on the back burner for the time being but would at least give the PA the borders for a permanent state of its own.

The prime minister is expected to try and convince Abbas to accept the deal, despite the PA leader's insistence that he will agree to nothing less than a PA state with Israel pulled back to its pre-1967 borders, contiguous land running between Gaza, Judea and Samaria, and with Jerusalem as its capital -- which Israel has already said it will never agree to.