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In addition to the release of prisoners, Israel has also agreed to transfer to Abbas a portion of the hundreds of millions of dollars in customs duties it collects on behalf of the Palestinian Authority and which it froze after Hamas came to power last year and refused to changes its policy of not recognizing Israel. Olmert also announced at the summit that he and Abbas would meet every two weeks.
These measures are part of a policy adopted by Israel in the wake of the Hamas takeover of Gaza, whereby Olmert has said he wants to reward the more moderate Palestinian forces Abbas and his Fatah movement in the West Bank, and squeeze the extremists -- Hamas in Gaza.
But it will take a lot more than the release of a handful of prisoners -- there are thousands in Israeli jails -- and the freeing up of funds to boost Abbas. The release of only Fatah prisoners could also paint the Palestinian leader as being in league with Israel -- an image Hamas is already trying to cultivate.
Abbas is also under pressure from Arab states to renew his dialogue with Hamas. If he does, it could endanger implementation of the steps Israel has announced over the last week as Olmert has made it clear he is now willing to deal with Abbas because the Palestinian leader has disbanded the Hamas-led national unity government and severed ties with the Islamic movement.
In their public statements at the end of the summit, neither Olmert nor Abbas mentioned the word "Hamas." Neither did their host, Egyptian President Hosni Mubarak, nor Jordan's King Abdullah, who also attended.
But the Islamic movement was uppermost in everyone's mind. And Hamas made sure that even if it wasn't in attendance, its presence was felt. Hours before the summit began, it released an audio recording of an Israeli soldier it has held captive in Gaza for the last year. In words clearly dictated by his captors, Cpl. Gilad Shalit, who was snatched from an army base inside Israel, complains that the Israeli government is not doing enough to free him.
Negotiations over the release of Shalit have been ongoing for months, with Hamas demanding the release of hundreds of Palestinian prisoners in Israeli jails -- according to some reports up to 1,000 -- in exchange for the Israeli soldier.
Some in Israel viewed the release of the audio tape, without any demand by the Islamic movement for a quid pro quo, as a sign that Hamas is becoming increasingly desperate to escape its growing isolation, especially now that it is solely responsible for the 1.2 million residents of Gaza. But there were others who read it differently: the release of the tape was a clear message from Hamas that despite all the efforts to marginalise it, the Islamic movement cannot be ignored.
At Sharm, Olmert had a message for the Palestinian people: "We are not indifferent to their pain, we do not ignore the need to end it, through mutual understanding, compromise and reconciliation," he said.
"As Prime Minister of Israel, I tell you that we have no desire to rule over you, we do not presume to run your lives, we have no intention of deciding for you. I believe that the day is coming when you can live in your own state, alongside the State of Israel."
Fine words, but eerily reminiscent of those uttered by previous Israeli leaders at the exact same location. Based on past experience, neither Israelis nor Palestinians will have been glued to their TV screens as the cameras recorded their leaders filing in and then out of yet another summit in Sharm el-Sheikh.
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