Olmert loses his grip on the Quartet.

The Israeli cabinet have overwhelmingly endorsed Olmert's refusal to have any dealings with the new Palestinian unity government, but the biggest story emanating from the Middle East is the hint given by Micaela Schweitzer-Bluhm, a spokeswoman for the US consulate-general in Jerusalem, that the US may continue to deal with non-Hamas members of the new government.

This is a position that mirrors the British one and represents a defeat for Olmert on the world stage, where he had hoped to prevent any members of the Quartet from recognising the new regime. This opens a door that Olmert would have preferred to keep firmly shut.

Norway became the first European state to recognise the Palestinian government. France has already invited the new Foreign Minister, Ziad Abu Amer, an independent, to Paris.

Margaret Beckett and her US counterpart continue to mouth their predictable demands that the new regime "recognise Israel" - an impossible demand as I covered here - but the most significant thing is that, by dealing with the non-Hamas members of the government, the dialogue that Olmert hoped to prevent will now begin to take place.

That can only be a positive step.

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Tags: Israel, Palestine, Hamas, Olmert, the Quartet, Ziad Abu Amer, sanctions, recognise Israel