Barak met with UN Secretary General Ban Ki-moon at the UN headquarters as Egypt's President Hosni Mubarak gave a speech in which he vowed to stay on until elections in September.

The Egypt troubles were raised but Barak refused to be drawn on the events in his comments to reporters afterwards. "It is up to the Egyptian people to find a way and to do it according to their own constitution, norms and practices," he said.

But despite Egypt's troubles and widespread criticism of Israel's refusal to halt settlements in the occupied Palestinian territories, the senior Israeli minister declared himself "optimist" that an accord could be reached.

"Despite of all the turbulence around us we should look for opportunities within those difficulties, rather than to spiral into a sense of too heavy uncertainty that paralyses us from acting towards a better and more stable region," Barak told reporters.

Israeli-Palestinian peace will only emerge from dialogue between the two, he added. The Palestinians have refused US-brokered direct talks since Israel ended a settlement moratorium at the end of September.

The minister, who recently quit the Labor party and set up his own centrist group to stay in the government, highlighted what he called "confidence building measures" in Gaza and the West Bank which he said were intended to strengthen "institutions and a kind of state in embryo."

Israel has slightly eased an embargo on Gaza and approved more construction in the Hamas-ruled territory while allowing the extension of the Palestinian Authority's presence in the West Bank and the building of new schools and clinics.

Barak said Israel was "ready to open immediate discussions about how to establish security arrangements with the future Palestinian state."

The UN chief "took positive note" of the measures in Gaza and the West Bank but told Barak it was "vital" to break the peace stalemate and urged Israel to meet its international commitments, UN spokesman Martin Nesirky said in a statement.

He also urged Israel "to take further steps to ease the suffering in Gaza," the spokesman said.

The Middle East diplomatic Quartet -- the United Nations, United States, Russia and European Union -- has set a deadline of September for an accord on setting up a Palestinian state. US President Barack Obama has also said he wanted a Palestinian member of the United Nations by September.

The deadlocked talks has led many nations to predict that the deadline will be missed however with a risk of new tensions.

earlier related report
Palestinian negotiator Erakat quits due to leaks
Ramallah, Palestinian Territories (AFP) Feb 12, 2011 - Palestinian chief negotiator Saeb Erakat tendered his resignation on Saturday amid deadlock in efforts to renew peace talks with Israel, a Palestinian official said.

Erakat told AFP he was stepping down because of his responsibility for the disclosure of confidential documents on Al-Jazeera, shortly after his resignation was announced by senior PLO Yasser Abed Rabbo.

The chief negotiator said he was assuming "responsibility for the theft of documents from his office" that he said had been "deliberately" tampered with.

Last month, Erakat accused Al-Jazeera of taking part in a campaign to overthrow the Palestinian Authority (PA) after the Doha-based television began to release more than 1,600 confidential files known as "The Palestine Papers."

The documents, shared by Al-Jazeera and Britain's Guardian daily, expose concessions to Israel in 10 years of secret peace talks, embarrassing and angering the Palestinian leadership.

Erakat at the time accused Al-Jazeera of trying to discredit the peace process and provoke his people into "a revolution against their leaders in order to bring down the Palestinian political system."

He pointed to a possible US-Israeli effort to topple the PA because of its refusal to take part in US-brokered direct peace talks unless the Jewish state halts West Bank settlement construction.

The files allege that Palestinian negotiators offered unprecedented concessions during peace negotiations, including on the ultra-sensitive subjects of Jerusalem and refugees, with nothing in return from Israel.

They also show PA members closely cooperating with Israel in its fight against the Palestinian Islamist movement Hamas, Fatah's bitter rival which rules the Gaza Strip.

Hamas on Saturday welcomed Erakat's offer to resign.

The step "shows that the leaked documents were authentic," spokesman Fawzi Barhum told AFP, urging the Palestine Liberation Organisation to halt all negotiations with Israel.

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