JERUSALEM, March 29 (Reuters) - Israeli Prime Minister Ehud Olmert said on Thursday there was a "revolutionary change" in the perception of the Arab states towards Israel, Israel's YNet news website reported.

YNet quoted Olmert as saying during a reception for his Kadima party faction: "There is a process here that the fighting in Lebanon (last year) has sharpened.

"This process has brought the influential countries in the Arab world to realise that Israel is not the biggest of all their troubles. This is a revolutionary change in their perception."

Arab leaders earlier on Thursday in Riyadh endorsed a 5-year-old plan offering Israel normal ties with all Arab countries in return for its 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.

Olmert described the summit as a "serious affair".

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