Arab ministers said they were encouraged by how Israel received a new Middle East peace plan on Wednesday as Prime Minister Ehud Olmert said serious talks had begun towards creating a Palestinian state.

The foreign ministers of Egypt and Jordan -- the only two Arab countries to recognise the Jewish state -- travelled to Jerusalem to urge Israel to accept the Arab League’s plan for comprehensive regional peace adopted in March.

Egyptian Foreign Minister Ahmed Abul Gheit said the initiative had met with a positive reception from Israel, after talks with Foreign Minister Tzipi Livni and the largely ceremonial head of state, Shimon Peres.

“We have heard a lot of positive commentary, from which we discern an intention on behalf of Israel to work seriously on giving the Palestinians an opportunity to achieve their state,” he told a news conference.

The ministers hoped to submit a report on the Jerusalem visit at a gathering of Arab League foreign ministers on Monday, before further talks with Olmert and Defence Minister Ehud Barak.

“We are extending a hand of peace on behalf of the whole region to you, and we hope that we will be able to create the momentum needed to resume fruitful and productive negotiations” Jordan’s Abdel Ilah al-Khatib told Peres.

The blueprint offers Israel normalisation of ties with Arab nations in exchange for full withdrawal from Arab land occupied during the 1967 Six-Day War, the creation of a Palestinian state and a return of refugees.

Israel rejected the plan when it was first launched in 2002, but has since said it could provide a basis for talks, provided amendments are made to the refugee issue.

Without going into specifics, Livni hailed what she called an ”historic opportunity” for Arab-Israeli relations, saying the Jewish state was determined to make progress in the peace process with the Palestinians.

“What we don’t want to do today is bring forward all our differences between the two sides,” she told the news conference.

“I believe that right now we can find the common demoninator (among Israel, the Palestinians and Arab states) and put it together to find the best process that we can promote and support,” she added.

Khatib said “time is of the essence to all the parties and we must embark on this historical moment to embark on peace.”

He urged Israel to take “proper and tangible steps” to change the situation on the ground, by lifting roadblocks and withdrawing from Palestinians areas that were reoccupied after the second intifada broke out in September 2000.

But in Cairo, Alaa Rushdie, a spokesman for the Arab League, distanced the 22-member body, which tasked Egypt and Jordan with persuading the Jewish state to accept the plan, from the visit.

“This is not under the Arab League flag, this is a trip by Jordan and Egypt, two countries which already have peace agreements with Israel, asked by the ministerial committee to explain the Arab peace initiative,” he said.

The talks came as Olmert said he has discussed steps towards establishing a Palestinian state with Palestinian president Mahmud Abbas.

“We have started very seriously to talk with Mr. Abbas on a peace process and questions which can allow a Palestinian state to be established,” he said following a meeting with President Shimon Peres.

“These discussions will continue at the pace we have agreed upon, and we are in agreement for them to continue until they bear concrete results,” he said.

Israel’s Haaretz newspaper reported earlier that Olmert was offering to hold talks to agree principles to establish a Palestinian state with Jerusalem as its capital before more sensitive diplomatic issues are tackled.

He would be likely to offer establishing a Palestinian state in Gaza, and about 90 percent of the occupied West Bank, with territorial compensation in exchange for retaining large Jewish settlement blocs, Haaretz said.

A recent flurry in diplomatic activity has seen international players try to revive dead-in-the-water peace talks and bolster Abbas after radical Palestinian movement Hamas seized control of the Gaza Strip last month.

US Secretary of State Condoleezza Rice is scheduled to visit Jerusalem and Ramallah next week, allowing her to prepare for international Middle East peace talks, which US President George W. Bush has announced for the autumn.