Prime Minister Ehud Olmert indicated on Sunday that there would be no major breakthroughs in peacemaking ahead of a U.S.-sponsored peace conference this fall, prompting a Palestinian threat to skip the gathering.

The crisis erupted just days before the arrival of Secretary of State Condoleezza Rice, who is expected in the region Tuesday to gauge progress on preparations for the conference. U.S. officials have said little about the meeting's agenda, and the list of participants has not been set.

At a meeting of his Kadima Party, Olmert dismissed recent reports that he and Abbas had agreed on binding principles to guide peace talks, officials said. Instead, he said he and the Palestinian leader would go no further than a non-binding declaration of intent.

"There is a difference between an agreement on principles and a declaration of intent," a participant in the meeting cited Olmert as saying, speaking on condition of anonymity because the meeting was closed.

Without the outlines of a final peace deal, the Palestinians say, the conference will be a failure.

"If Olmert says there'll just be a declaration, it's not worth going to this meeting," said Nimr Hamad, an adviser to Abbas.

Peace talks have snagged in the past over three key issues _ final borders, control over disputed Jerusalem and a solution for millions of Palestinian refugees.

Olmert and Abbas have broached these topics in recent talks, but the Palestinians have been pressing for greater Israeli commitment ahead of a conference.

After years of deadlock, peace efforts have gained momentum following the Hamas group's violent takeover of the Gaza Strip and Abbas' subsequent expulsion of the Islamic group from government. With Hamas out of the government, Western powers hope the moderate Abbas will have a freer hand to negotiate with Israel.

But analysts question whether he or Olmert is strong enough politically to make the concessions that would be needed for agreements on the explosive issues that divide the two sides.

At their latest meeting last week, Olmert offered some gestures meant to bolster Abbas in his power struggle with Hamas, like proposing to release an unspecified number of Palestinian prisoners during the current Muslim holy month of Ramadan.

Israel holds about 11,000 Palestinian prisoners, and their fate is an emotional issue in Palestinian society.

Olmert and Abbas are scheduled to meet every two weeks leading up to the November meeting.

In Gaza, meanwhile, a spokesman for Gaza's Hamas rulers, Taher Nunu, said the Islamic militant group had "renewed" its commitment to a mutual truce with Israel, which has broken down amid Palestinian rocket attacks and Israeli retaliation.

Despite the offer, Hamas has intensified its military training in recent days, citing a possible large-scale Israeli incursion. It also hasn't ordered its men to lay down their arms or tried to halt Palestinian militants from firing rockets into southern Israel.

There was no immediate Israeli response. But earlier Sunday, the Israeli army penetrated about 700 yards into southern Gaza as part of what the military described as "a routine operation against terrorist targets."