JERUSALEM, April 1 (Reuters) - German Chancellor Angela Merkel opened talks with Israeli and Palestinian leaders on Sunday as part of a push for renewed peacemaking, but aides said she would not meet members of a Palestinian unity government.

Merkel, holder of the European Union's rotating presidency, is trying to build on momentum from last week's Arab summit but has said that obstacles lie ahead.

Arab leaders have revived a five-year-old peace plan that offers Israel normal ties with all Arab countries in return for withdrawal from land seized in the 1967 Middle East war, the creation of a Palestinian state and a "just solution" for Palestinians displaced in 1948 with Israel's creation.

Merkel met Israeli Prime Minister Ehud Olmert on Saturday night and held morning talks with Foreign Minister Tzipi Livni before touring the Yad Vashem Holocaust museum.

She will meet Palestinian President Mahmoud Abbas of Fatah in the West Bank city of Ramallah later on Sunday and then return to Jerusalem for further talks with Olmert.

During a visit to Jordan on Saturday, Merkel urged the Palestinian unity government to embrace the demands of the Quartet of Middle East mediators to recognise Israel, renounce violence and abide by existing peace accords.

The unity government's programme contains a promise to "respect" previous Israeli-Palestinian pacts but does not call for recognising Israel and says resistance against the Jewish state in "all its forms" is a legitimate Palestinian right.

As EU president, Germany represents the 27-member bloc in the Quartet, which also includes the United States, the European Union, Russia and United Nations.

Hamas spokesman Fawzi Barhoum said on Saturday the Islamist group "will never recognise the right of Israel to exist".

In a break with Israeli policy, European Union foreign ministers agreed on Saturday to engage with non-Hamas members of the unity government.

Olmert has vowed to shun the unity government, including non-Hamas ministers.

Merkel will not meet members of the unity government, including non-Hamas ministers, during her visit, her aides said.

Merkel has made reviving the stalled peace process a priority but hopes for a breakthrough are low.

During her Middle East tour, Merkel will also visit Lebanon, meeting Prime Minister Fouad Siniora and dropping in on a German frigate which is part of the U.N. peacekeeping mission there.

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