Building in Ma'aleh Adumim and Har Homa does not prejudice a final-status agreement with the Palestinians, a senior Israeli official said after Prime Minister Ehud Olmert met with Palestinian Authority President Mahmoud Abbas Thursday in Jerusalem. Olmert and Abbas met at the Prime Minister's Residence for their first meeting since last month's Annapolis conference. "Both sides committed themselves to not taking any action that would prejudice a final-status agreement," Olmert's spokesman, Mark Regev, said. According to a senior Israeli official, both Ma'aleh Adumim and Har Homa were already existing facts and therefore adding to them does not prejudice any possible agreement. The Israeli position, the official said, was that if you build in an existing community you are not creating any new facts on the ground that prejudge a final agreement. The issue of construction in Har Homa and Ma'aleh Adumim, an issue that has overshadowed the two previous rounds of bilateral talks held since Annapolis, was discussed at Thursday's meeting. Senior officials in the Prime Minister's Office said the two leaders "dealt with substance, especially in the private talks, and are making progress." One official said the Palestinians, represented at the meeting by Abbas, former PA prime minister Ahmed Qurei and PA negotiator Saeb Erekat, put "their issues" on the table, including settlement construction, and Israel presented them "with what bothers us." In addition to Olmert, Israel was represented by Foreign Minister Tzipi Livni, Olmert's chief of staff, Yoram Turbowicz, and his foreign policy adviser, Shalom Turgeman. The meeting lasted for two hours, with Abbas and Olmert meeting privately for an hour. "The fact is that we are continuing to speak," the senior official in the Prime Minister's Office said. It was clear that not everything would be agreed upon in one meeting and that "we need to talk a great deal," he said Livni and Qurei are scheduled to hold another meeting early next week. Their two previous meetings, including one held Wednesday, were primarily forums where both sides aired grievances about the other. Following Thursday's meeting, Regev said, "Both sides reiterated their commitment to implement all their obligations under the road map, and that both sides committed themselves to ongoing, serious and continuous dialogue to try and narrow gaps and solve problems."