RAMALLAH, West Bank - Palestinian President Mahmoud Abbas, emboldened by an outpouring of international support in his showdown with Hamas militants, on Monday told a receptive President Bush that it was time to restart Mideast peace talks.

An Israeli paramedic reacts at Israeli side of the Erez border crossing with the Gaza Strip, Monday June 18, 2007. [AP]

Bush planned to relay their thoughts on how to proceed to Israeli Prime Minister Ehud Olmert at a meeting in Washington Tuesday, a White House spokesman said.

Abbas' Hamas rivals were headed in a vastly different direction, facing deepening isolation after their violent takeover of the Gaza Strip.

Abbas expelled Hamas from the Palestinian government last week after the Islamist group routed his forces in Gaza, leaving the president's more moderate Fatah movement in control of the West Bank. Olmert made no public statements Monday but Israel has expressed its desire to negotiate with a Palestinian government without Hamas. It remained unclear, however, how much peace talks could accomplish.

Israel and Egypt have sealed Gaza's borders, raising fears of a possible humanitarian crisis. After a weekend run on basic supplies, Gazans were calmed by Israeli assurances that humanitarian aid would go through. But Israeli officials said they had not figured out how to deal with Gaza's Hamas rulers.

At the Erez crossing between Israel and Gaza, where about 300 Gazans have been trapped trying to escape Hamas rule, a clash between Israeli soldiers and Palestinian gunmen killed at least one Palestinian and wounded 15, the Israeli rescue service and Palestinian hospital officials said. Israel TV said as many as four people were killed.

Families and children, along with fleeing Fatah security men, slept on cardboard on the concrete floor of a narrow tin-roofed tunnel at the crossing where scores have been huddled for three days with no access to water or toilets. Many of the children had streaked faces and dirty feet.

Even after the shooting, Palestinian medics said, many of the wounded were treated on the spot because they refused to go to Gaza hospitals.

Israel said it was only allowing the passage of international organizations' staff, people with special permission and humanitarian cases.

"We believe these 300 are not in danger and they can go home," military spokesman Shlomo Dror said.

Also Monday, militants in Gaza fired two rockets at southern Israel, the military and local media reported. One landed in the town of Sderot. Two Israelis were treated for shock. There was no claim of responsibility from Gaza.

To bolster Abbas, the United States and the European Union said they were ending a 15-month embargo that cut off hundreds of millions of dollars in direct aid after Hamas won elections and formed a government.

Bush also called Abbas to offer his support, and Abbas said during the 15-minute conversation that he was ready to restart peace talks with Israel, according to an Abbas spokesman. Peacemaking stalled nearly seven years ago with the outbreak of the second Palestinian uprising.

"President Abbas told Mr. Bush that this is the time to resume the political negotiations and to revive the hope of the Palestinian people," Abbas spokesman Nabil Abu Rdeneh said.

Bush "pledged help and support" to Abbas and said he would share their thoughts on the peace process with Olmert, who planned a White House visit Tuesday, press secretary Tony Snow said.

"What's important is, you have to have a partner who is committed to peace," Snow said. "We are committed to working with this new emergency government."

Olmert has said the new Palestinian government is a "new opportunity" for peacemaking and he is eager to bolster Abbas.

In a phone call with Olmert, Jordan's King Abdullah II urged Palestinian and Israeli leaders to do the groundwork for restarting the peace process and achieve a two-state solution, Jordan's royal palace said.

The embargo against the Palestinian government has crippled the Palestinian economy, which is heavily dependent on foreign aid. Under the sanctions, the government was unable to pay its 165,000 employees regular salaries. The government is the largest employer in the West Bank and Gaza, sustaining about one-third of Palestinian families.

Secretary of State Condoleezza Rice said she told Prime Minister Salam Fayyad in a phone call Monday that, "the United States would resume full assistance to the Palestinian government and normal government-to-government contacts."

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