By Adrian Croft

BEN GURION AIRPORT, Israel, July 19 - Britain's Gordon Brown will discuss a way ahead in Middle East peace moves and announce new aid for the Palestinians during his first visit as prime minister to Israel and the Palestinian territories, which began late on Saturday, British officials said.

During the two-day visit, Brown will announce $60 million in new budgetary support for the Palestinian Authority and become the first British prime minister to address the Israeli parliament, the officials said.

On Sunday, Brown will hold talks on the peace process with Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert and take part in a British-Israeli business conference.

Brown's spokesman said the prime minister wanted to "discuss the way forward in the peace process" with Israeli and Palestinian leaders and to focus on economic reconstruction and development in the region.

Britain and the United States sponsored an investment conference in the occupied West Bank town of Bethlehem in May, at which private investors pledged to pump $1.4 billion into Palestinian businesses to bolster the economy.

Brown has made strengthening the Palestinian economy a key plank of his policy towards the region, arguing that the political and security situation there can only improve if there is a strong and sustainable Palestinian economy.

Before giving a speech to the Israeli parliament or Knesset on Monday, Brown will lay a wreath on Sunday at the Yad Vashem Holocaust memorial and visit the Church of the Nativity in Bethlehem, built on the spot where Christians believe Jesus was born.

Olmert said this week that the Israelis and Palestinians had never been so close to a peace deal, though problems still had to be overcome.

Olmert and Abbas launched U.S.-sponsored peace negotiations last year with the aim of reaching an agreement before President George W. Bush leaves office next January, but progress has been hindered by vehement mutual recriminations.

Brown, who succeeded Tony Blair as British prime minister in June last year, has seen his poll ratings plunge as the credit crunch and high fuel prices have hit the economy. His Labour party lags the opposition Conservatives by up to 20 percentage points in opinion polls. (Editing by Tim Pearce)

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