After a meeting with Foreign Minister Tzipi Livni, who heads the Israeli negotiating team, and Defence Minister Ehud Barak, Mr Olmert appointed Brigadier General Udi Dekel to 'head the negotiations division with the Palestinians,' it said.

'Dekel will coordinate the work related to the peace process with the Palestinians for the negotiating team, will formulate Israel's positions and will take part in the talks on a permanent settlement.'

BG Dekel, 51, who currently serves as the head of the army's strategic planning division, will take up his new post 'in the coming days after he is discharged from the army,' the statement said.

Israeli and Palestinian negotiators began talks last month on the thorniest issues of the Middle East conflict after the peace process was relaunched at a US-sponsored international conference last November.

Both Mr Olmert and Palestinian president Mahmud Abbas have said they hope to reach a historic peace agreement by the end of 2008. -- AFP