Arab and Israeli leaders are gathering for a summit in Egypt, seen as a show of support for President Mahmoud Abbas.

The talks in Sharm el-Sheikh involve Abbas, Egypt's President Hosni Mubarak, Jordan's King Abdullah and Israeli Prime Minister Ehud Olmert.

It comes days after Abbas' Hamas rivals took control of the Gaza Strip.

On the eve of the summit, Israel agreed to release frozen tax funds to the new Palestinian government excluding Hamas.

Hamas leader Ismail Haniya, who was dismissed as prime minister by Abbas, described Israel's move as 'blackmail'.

Israel, meanwhile, sought to downplay expectations of the summit, rejecting Arab calls to enter into negotiations on a final peace deal with the Palestinians.

The summit is aimed at bolstering the position of Abbas, the BBC says.