Jerusalem ? In a peace overture to the Palestinians a day after a shaky cease-fire took hold in the Gaza Strip, Prime Minister Ehud Olmert on Monday offered a series of conciliatory steps, including the release of large numbers of prisoners in return for an Israeli soldier seized by militants in June.

In was the first public declaration by Olmert of readiness for a prisoner exchange, and it came in a speech billed as an attempt to create political momentum following the truce agreement.

Olmert has come under harsh domestic criticism from some quarters for failing to present a diplomatic agenda for progress with the Palestinians. The criticism intensified after five months of military operations in Gaza failed to halt rocket attacks on Israel or bring home the captive soldier, Cpl. Gilad Shalit, seized in a cross-border raid on June 25.

Dissatisfaction

The prime minister’s standing had already been battered by widespread public dissatisfaction with his handling of last summer’s war with Hezbollah in Lebanon, widely perceived by Israelis as a military failure.

Olmert’s speech, in which he promised the Palestinians broad territorial concessions in return for genuine peace, came as the Bush administration is being urged to address the conflict here as a part of a more comprehensive diplomatic approach to the Middle East and the crisis in Iraq.

It was unclear whether Olmert’s remarks, two weeks after his meeting with President Bush at the White House, were more a response to domestic pressure or to prodding from Washington. State Department spokesman Sean McCormack called Olmert’s speech “constructive.”

“I extend my hand in peace to our Palestinian neighbors, hoping that it will not be rejected,” Olmert said in an address during a memorial ceremony at the gravesite of Israel’s first prime minister, David Ben-Gurion, in the Negev desert.

Olmert said that if a new Palestinian government is formed that meets international demands to recognize Israel, renounce violence and accept previous accords, and which commits itself to a U.S.-backed “road-map” peace plan and brings about the release of Shalit, he would invite Palestinian President Mahmoud Abbas “to conduct a real, open, sincere and serious dialogue” leading to the establishment of a Palestinian state.

“With Gilad Shalit’s release and his return, safe and sound, to his family, the government of Israel will be prepared to release many Palestinian prisoners, including those sentenced to long terms, in order to increase the trust between us,” Olmert said.

Exchange

The release of long-serving prisoners has been a consistent Palestinian demand. Shalit’s captors have demanded the release of 1,000 prisoners, in addition to a few hundred Palestinian women and minors held in Israeli jails.

Repeating offers made in the past, Olmert said that if the Palestinians halted violence, Israel would take a series of steps to ease their daily hardships. These would include reducing the number of checkpoints on West Bank roads, easing passage through crossings on the borders of the Gaza Strip, and releasing frozen Palestinian tax and customs duties to fund humanitarian aid.

Israel released some of those funds earlier this year, earmarking them for Palestinian health services. The Israelis have withheld millions of dollars of tax and customs duties they collect on behalf of the Palestinians since the Hamas-led Palestinian government took office early this year.

Olmert said that as part of a peace deal, Israel “will agree to the evacuation of many territories and settlements we have built there.”

“This is tremendously difficult for us, like the parting of the Red Sea” he added. “We will bear it for real peace.”

Olmert did not specify what areas would be relinquished, but he referred to a 2004 letter from Bush to former Prime Minister Ariel Sharon that suggested Israel could keep large settlement blocs in the West Bank.

Reaction

Palestinian spokesmen reacted coolly to Olmert’s statements.

“We want to see deeds, not words,” said Nabil Abu Rudeineh, a spokesman for Abbas. “What we are looking for is real negotiations, based on the roadmap and the Arab peace initiative. Land for peace.”

Abu Rudeineh referred to a Saudi initiative adopted at an Arab League summit in 2002 that called for recognition and normal ties with Israel in exchange for a full withdrawal from territories it occupied in the 1967 Middle East war.

Ghazi Hamad, the spokesman for the Hamas-led Palestinian government, was more dismissive. “This is a conspiracy,” he said. “This is a new maneuver. Olmert is speaking about the Palestinian state without giving details about the borders.”