The European Union's top diplomat Javier Solana said in Brussels on Tuesday Israel and the Palestinians could possibly strike a peace deal this year.

"Politically, an important meeting took place yesterday," he said in the European Parliament, referring to the meeting between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmud Abbas in Jerusalem.

"I do think that we have still a chance to move the process to a settlement before the end of year 2008," Solana said, adding "I don't want to sound too optimistic, I want to sound realistic."

He said if the process was not able to be pushed forward "in a dynamic manner by this period of time, maybe we'll have to begin to think that the possibility of an agreement in the year 2008 will be further away."

The summer would see a clearer prospect, said Solana, who noted that the situation in Gaza has become "more relaxed than it used to be."

Olmert and Abbas, who met for the first time in nearly two months, promised to push for "an historic agreement" by the end of this year.

(Xinhua News Agency April 9, 2008)