Amid a swirl of reports that Prime Minister Ehud Olmert and Palestinian Authority Chairman Mahmoud Abbas are drafting an agreement on principles dealing with Jerusalem, borders and refugees, officials from both sides adamantly denied Tuesday night that such a document was exchanged when the two leaders met earlier in Jerusalem. Al Jazeera satellite television broadcast on Tuesday what it claimed was the two-page document drawn up by the two sides, but Israel dismissed the report as false. "There is no such document," a spokesman in the Prime Minister's Office said. "It doesn't exist." The official, continuing with the office's policy of releasing only minimal information about what is being discussed with Abbas and the PA, said the two leaders - in a 90-minute private meeting at Olmert's official residence - "spoke about the fundamental issues essential to arriving at two states for two peoples." The two are widely believed to be putting together an agreement that will be brought to the US-sponsored international conference in the fall. A willingness to discuss these issues at the international meeting is widely considered in Jerusalem as a prerequisite to Saudi participation, which both Israel and the US are very keen on securing. Olmert and Abbas, who last met on August 6, are expected to meet again before the scheduled visit in mid-September of US Secretary of State Condoleezza Rice. Israeli government officials say that discussions on Jerusalem, refugees and borders are being conducted at a very general level, with details to be filled in at negotiating sessions that will be held after the international summit. Meanwhile, PA officials played down the significance of Tuesday's meeting, saying the two leaders did not exchange any written documents and that in any case Abbas was planning to call a national referendum on any agreement he reached with Israel. They expressed doubt that a majority of Palestinians would endorse an agreement that did not call for a full Israeli withdrawal to the pre-1967 borders, including leaving east Jerusalem. "Today's meeting was good and thorough, but until now we haven't discussed any details related to the fundamental issues," said chief PA negotiator Saeb Erekat. "Nor have we reached the stage of exchanging documents. We did not hand over to the Israelis any written document. Likewise, we did not receive from them anything in writing." Erekat said Abbas's goal was to achieve a just and comprehensive peace with Israel based on the two-state solution. He warned against attempts to "prejudice" the Israeli-Palestinian talks, saying some parties were operating outside the frame of the official negotiations. "The Palestinian leadership wants peace, but not at any price," Erekat said. "The peace we are seeking must be based on all the UN resolutions pertaining to the Israeli-Arab conflict, the Arab [League] peace plan of 2002, the road map and US President George W. Bush's vision for two states. Together, all these plans and resolutions will lead to an end of the Israeli occupation of all the territories that were occupied in 1967." He added that Abbas had also emphasized during the meeting the need to agree on a mechanism and timetable for implementing any future agreement. Erekat said the PA still hadn't received an official invitation to participate in the Middle East peace conference slated for November. The Palestinians, he said, had made it known they would like to see as many Arab countries as possible at the planned summit, including Syria and Lebanon. "Since we are talking about a just and comprehensive peace with Israel, we would like to see other Arab countries there," he said. "We won't accept any attempt to mess around with the tracks." Erekat said Abbas demanded during the meeting with Olmert that Israel release more Palestinian security prisoners and allow some 26 Palestinians who were deported from Bethlehem to the Gaza Strip and European countries in 2002 to return home. Abbas also raised the issue of IDF checkpoints in the West Bank and restrictions imposed on the movement of Palestinians there, Erekat said. In addition, Abbas demanded that Israel end its siege of the Gaza Strip and allow the international community to resume humanitarian aid to the population there. Each of these issues was also raised at the previous Olmert-Abbas meeting on August 6. Israeli officials said the private Abbas-Olmert meeting was followed by a wider meeting that included key staffers and also lasted for 90 minutes. At that meeting, during which Olmert thanked the PA for rescuing the IDF officer who strayed into Jenin on Monday, the sides talked about ways to bolster the PA security apparatus and to enhance security coordination, with the goal being to reach a point where Israel would be able to transfer security control over West Bank cities to the PA. But for this to happen, one official said, the PA would have to prove it could impose its control. There was also an extensive discussion in this wider meeting about weapons smuggling into Gaza from Egypt. It was decided that US and Egyptian security teams would meet with Israeli and PA officials to weigh different ways of combating this phenomenon. The deputy head of the Shin Bet (Israel Security Agency) told the cabinet Sunday there had been a significant increase in arms smuggling since Hamas took control of Gaza in the beginning of June. Olmert told Abbas Israel would soon present a detailed plan worked out by the security establishment for removing West Bank roadblocks and enabling freer access from one Palestinian city to the next. He also said Israel would consider releasing more Palestinian prisoners. The two leaders agreed to the establishment of a common economic council to promote joint economic ventures. This new council is scheduled to be launched at an event in Tel Aviv in October attended by Olmert, Abbas and Quartet envoy Tony Blair. Israeli officials dismissed as "nothing more than speculation" reports that Israel was proposing that control of the Temple Mount be shared between the three major monotheistic religions, and that control of the Arab neighborhoods of east Jerusalem would be ceded to the PA. Settlers reacted quickly and angrily to reports on Tuesday that Olmert was talking with Abbas about giving up settlements, dividing Jerusalem and looking at the issue of Palestinian refugees in advance of the international conference in November. "Nothing good can grow from this," said Dani Dayan, who chairs the Council of Jewish Communities of Judea, Samaria and the Gaza Strip. He penned a protest letter to all the Knesset members from the right-wing and centrist parties, asking them to work against such an agreement before it was too late. "This is neither a peace agreement nor the end of the conflict," said Dayan. A Palestinian state in Judea and Samaria would threaten Israel's existence, Dayan said. After all, how will it be possible to continue to strengthen Abbas once Israel has given up everything? Dayan asked. Such a state would only open the door for Hamas to wrest control of the West Bank much like it did in Gaza, he said. Kfar Saba is closer to Kalkilya then Sderot is to the nearest Gaza city, Beit Hanun, and as such, Kfar Saba would be an easier target for rocket fire, Dayan said. MK Yuval Steinitz (Likud) said Olmert's readiness to divide Jerusalem and to take Israel back to the 1949-1967 "Auschwitz" borders imperiled the country's security and its ability to survive. In Gaza City, meanwhile, Izzat Risheq, a top Hamas official in the Strip, called on Abbas to talk to Hamas instead of meeting with Israelis. "These talks are being held at a time when the Palestinians are divided, and that's why they don't serve the interests of our people," he said. "The talks are aimed at increasing security coordination between Abbas's Authority and Israel to eliminate the Palestinian resistance. As far as we are concerned, this is a form of treason." Tovah Lazaroff contributed to this report.