JERUSALEM (AP) – Prime Minister Olmert on Sunday asked his Cabinet to unfreeze millions of dollars in Palestinian Arab tax money as part of a package of goodwill gestures meant to shore up Palestinian President Abbas in his bitter battle with Islamic Hamas militants.

The Cabinet was expected to approve Mr. Olmert’s proposal ahead of his meeting in Egypt Monday with Mr. Abbas, President Mubarak of Egypt and King Abdullah II of Jordan.

The summit is designed as a high-profile display of support for the Palestinian president against his Hamas rivals, who seized control of the Gaza Strip in a brutal rout of Mr. Abbas’ Fatah movement earlier this month. The infighting has left the Palestinians with two governments – Abbas’ new government in the West Bank, and the Hamas rulers in Gaza.

The main proposal at Sunday’s Cabinet meeting was a gradual release of some $550 million in tax money that Israel has withheld from the Palestinians since Hamas swept Palestinian parliamentary elections in January 2006.

Israel considers Hamas a terrorist group. But now that Abbas has expelled the Islamic group from the Palestinian government, Mr. Olmert is expected to unfreeze the money.

“We are raising at today’s Cabinet meeting a proposal to unfreeze funds we have been holding for a long period, Palestinian funds, in order to support in a phased process the new Palestinian government, which is not a Hamas government,” Mr. Olmert told his ministers.

The money – mostly customs duties that Israel collects on behalf of the Palestinians – has been withheld in an unsuccessful bid to pressure Hamas to recognize Israel’s right to exist and renounce violence. Without the money, the Palestinian government has been unable to pay the salaries of its workers.

The Cabinet also was expected to discuss the removal of some of the hundreds of roadblocks Israel has erected throughout the West Bank. The travel restrictions have been put in place on security grounds, though the Palestinians say they are excessive and punitive.

Similar gestures have been weighed in the past, and then, as now, Israel will demand in return that Abbas confront militants – something he had been reluctant to do before Hamas rolled over Fatah security forces and wrested power in Gaza.

Since then, Abbas has acted with unprecedented force: He expelled Hamas from its coalition government with his Fatah movement, set up an emergency Cabinet, and embarked on a widening crackdown on the Islamic group that has included arrests of hundreds of gunmen in the West Bank and a plan to dry up its funding.

Mr. Olmert told the Cabinet that while Israel wants to boost Mr. Abbas, he also would lay out Israel’s expectations at Monday’s summit in Egypt.

“We shall present there are expectations from the opposite side, our demands on the issues of security and the war against terror, but definitely also our readiness to cooperate with the new government,” he said.

Mr. Olmert said Israel will continue to ensure that humanitarian aid reaches the Hamas-controlled Gaza Strip. “We shall, of course … make sure we supply all the services: electricity, water, medical services and food,” he said.

Not all Israeli Cabinet ministers are convinced Mr. Abbas will wrestle Hamas to the mat.

Avigdor Lieberman, leader of the hardline Yisrael Beiteinu party, said he would vote against any aid to Abbas. The new Fatah-led government has “no intention…of arresting a single terror operative,” he told Army Radio.

“Why should we believe all these lies? We have years of experience with Abu Mazen,” Mr. Lieberman said, referring to Abbas by his nickname. “Other than pronouncements, we haven’t seen anything from him.”

But Mr. Olmert has expressed optimism that the main stumbling block to renewed peace talks with the Palestinians has been removed with Hamas’ ouster from the Palestinian government. The prospect for re-energizing long-stalled peace talks is expected to be a major item at the regional summit on Monday.

An Israeli pullout from the West Bank – a prerequisite for Palestinian statehood – is unlikely, however, unless Abbas can ensure the evacuated territory won’t be taken over by militants and used to launch attacks on Israel. Abbas’ failure to do that in Gaza could make Israelis less inclined to risk a West Bank withdrawal.