Israeli prime minister Ehud Olmert has invited Arab leaders to attend a regional peace conference.

Mr Olmert issued the invitation during a news conference in Jerusalem with the visiting German leader, Angela Merkel.

Invitees include the King of Saudi Arabia, who Mr Olmert said he saw as "a very important leader".

At a summit in Riyadh last week, Arab leaders urged Israel to accept an Arab peace plan for the Middle East first proposed in 2002.

"I am announcing to the heads of the Arab states on this occasion that if the Saudi king initiates a meeting of moderate Arab states and invites me and the head of the Palestinian Authority in order to present us the Saudi ideas, we will come to hear them and we will be glad to voice ours," Mr Olmert said.

"I invite all the heads of the Arab states, including of course the Saudi king whom I consider a very important leader, to hold talks with us.

"I think it is time to make a momentous effort in order to give a push to the diplomatic process... I am optimistic," he said.

Earlier, speaking after his own talks with Mrs Merkel, Palestinian leader Mahmoud Abbas had called on the Israeli government to constructively respond to the new Arab peace initiative.

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Israeli prime minister Ehud Olmert