The teams, whose formation was announced following a meeting between the two leaders in Jerusalem Monday, will focus on such areas as economics, energy and water, but will not address such critical issues as the borders of a future Palestinian state, the fate of refugees or the status of Jerusalem.

Olmert also said he would recommend that an unspecified number of Palestinian prisoners be released in time for the upcoming Ramadan holiday.

Bitter street fighting in June between supporters of the Islamist Hamas movement and Abbas' more moderate Fatah party split control over the Palestinian territories, leaving Hamas in charge of the Gaza Strip and Fatah in charge of the West Bank.

However, a recent meeting of the Arab League in Cairo reaffirmed that Abbas was the legitimate leader of the Palestinian people, and that Gaza and the West Bank were parts of a single Palestinian entity. - RIA Novosti