(Adds comments by Israeli vice premier)

JERUSALEM, Nov 2 (Reuters) - Israeli Prime Minister Ehud Olmert hopes to reach a peace deal with the Palestinians before U.S. President George W. Bush leaves office, an Israeli government official said on Friday.

In separate remarks, Olmert's deputy said talks with the Palestinians on core statehood issues, including the future of Jerusalem and Palestinian refugees, would immediately follow a U.S.-led conference due late this month or early in December.

"There are big advantages to reaching an agreement before the end of Bush's term. This is the right thing to do. It is the best thing to do for both sides," the official quoted Olmert as telling German Foreign Minister Frank-Walter Steinmeier.

The official said Olmert wanted to seize the opportunity because it was impossible to know how committed the next U.S. administration would be to solving the Israeli-Palestinian conflict.

Olmert also wants to take advantage of a commitment by the Bush administration that Israel can keep control in any peace deal of large Jewish settlement blocs in the West Bank, on land it occupied in the 1967 Middle East War, the official said.

The Palestinians, who have been trying to formulate with Israel a joint document for the coming conference in Annapolis, Maryland, have said they want a peace accord by August, when the campaign for the U.S. election in November 2008 heats up.

Bush will leave office in January 2009.

Speaking on Israel Television, Vice Premier Haim Ramon said: "Immediately after Annapolis, when we begin to hold negotiations on a permanent agreement, certainly we will talk about Jerusalem, refugees, borders and Israel's security."

Palestinians want a timeline for a peace deal, but Israel opposes such a condition, fearing renewed violence should the talks collapse.

Olmert also has said he would not implement an agreement until Palestinians fulfilled their commitments under the U.S.-backed peace "road map" that charts reciprocal confidence-building steps leading to statehood.

Israel has said the Palestinians have failed to carry out their obligation to crack down on militants. Palestinians point to Israel's failure to uphold its pledge in the 2003 document to halt settlement expansion in the West Bank. (Reporting by Adam Entous and Jeffrey Heller; writing by Avida Landau and Jeffrey Heller, Editing by Tim Pearce; Reuters Messaging: jeffrey.heller.reuters.com@reuters.net))

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