(Adds comments by Israeli officials)

By Adam Entous

JERUSALEM, Aug 4 (Reuters) - Palestinian President Mahmoud Abbas expects to discuss key issues for creating a Palestinian state with Israeli Prime Minister Ehud Olmert at a meeting in the West Bank on Monday, Abbas's top aides said on Saturday.

The United States is pressing the Israeli and Palestinian leaders to find common ground on some of these issues within four months, in time for a Middle East conference proposed by U.S. President George W. Bush, officials said.

U.S. Secretary of State Condoleezza Rice said earlier this week that Olmert had agreed to begin talks with Abbas on "fundamental" issues.

But U.S. officials would not say whether this meant that the two leaders would discuss the most contentious final-status questions of borders, the future of Jerusalem and the right of return for Palestinian refugees.

Abbas aide Nabil Amr confirmed that Olmert and Abbas will meet in the West Bank city of Jericho on Monday. It will be their first bilateral meeting in the occupied West Bank.

Amr said the meeting would allow Abbas and Olmert to discuss "political issues" central to the conflict, including so-called final status issues for the creation of a Palestinian state.

Abbas adviser Yasser Abed Rabbo said the meeting would address final status issues to create momentum before the international conference.

Olmert's office declined to comment on the agenda for the talks with Abbas, whose Fatah faction was routed in June in fighting in the Gaza Strip by Hamas Islamists who seized the territory.

But Israeli officials said Olmert was prepared to discuss "fundamental" issues with Abbas and restated a goal of reaching an agreement on "principles" in advance of the international conference expected by the end of the year.

These principles, the Israeli officials said, would broadly call for Israel to withdraw from about 90 percent of Palestinian territory but would not identify specific Jewish settlements in the West Bank that would be uprooted.

EXPLOSIVE ISSUES

Olmert and Abbas would also discuss explosive issues like the fate of Palestinian refugees, with the goal of reaching common ground on such things as compensation, the officials said.

Israel, citing demographic and security concerns, rejects an influx of Palestinians to homes now in the Jewish state.

The Israeli officials said they believed it would be easier to sell an agreement that is broad brush to the Israeli and Palestinian public than one that included specific details.

Olmert, the officials said, was reluctant to commit to any specific timetables for the negotiations and implementation.

It is unclear whether Olmert, whose popularity plummeted after last year's inconclusive war in Lebanon, can make major concessions. It is also uncertain how Abbas can deliver on any deal with Hamas in control of the Gaza Strip.

A Western official in the region said Washington wanted talks between Olmert and Abbas "to become deeper and more energetic over the next period leading up to the international meeting in the fall".

Saudi Arabia, which does not have diplomatic relations with Israel, signalled earlier this week it intended to attend the conference if "substantive" issues were addressed. (Additional reporting by Ali Sawafta and Mohammed Assadi in Ramallah)

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