Hours before the arrival of US President George W. Bush, Prime Minister Ehud Olmert said Tuesday evening that "real progress" has been achieved in the negotiations with the Palestinian Authority, and that "understandings and agreements have been reached on important matters, although not on all issues." Speaking at the gala opening of the presidential conference in honor of Israel's 60th anniversary in Jerusalem, Olmert termed the discussions with the PA "highly serious and significant." "There is some real progress, and some important understandings have been reached in important areas, though not in all areas," he said. This was the first time, diplomatic officials said, that the prime minister had publicly characterized the talks in such an upbeat fashion. Last week, after Olmert met with PA President Mahmoud Abbas, it was Olmert's spokesmen - not the prime minister himself - who said the talks were progressing significantly, leading some to charge that the Prime Minister's Office was merely trying to deflect attention from the Talansky affair with positive diplomatic news. Olmert's assessment Tuesday came the same day Quartet envoy Tony Blair unveiled a package of measures to allow Palestinians greater movement in the West Bank and help the Palestinian economy grow in a way that he said would be consistent with Israeli security. Among the measures are the removal of four checkpoints, the upgrade of seven others, and the relocation of another to a less intrusive position. Diplomatic sources in Jerusalem said both Olmert's positive assessment and Blair's announcement were timed for Bush's visit, and were an attempt to show progress and momentum in the diplomatic process. The officials said the Americans had originally wanted some kind of memorandum of understanding spelling out what had been agreed upon to be signed between the PA and Israel during Bush's two-day visit, but that this did not pan out. Although Bush's visit will be largely ceremonial, including an address to the Knesset, participation in the presidential conference and a trip to Massada, he will also be spending a great deal of time with Olmert, during which time the diplomatic process with the Palestinians is expected to loom large. Olmert is scheduled to meet Bush shortly after his arrival on Wednesday, accompany him to Massada on Thursday morning and dine with him on Thursday night. Diplomatic officials said that in addition to the Palestinian track, all the other major issues now on the agenda - Iran, Syria and Lebanon - would be discussed. During his speech on Tuesday night, Olmert said he hoped an agreement would be reached that would be gradually implemented and linked to the road map peace plan. "That agreement will ensure the future of Israel as a Jewish state, with the full backing of the US and the international community," he said, adding that it would win acceptance of the Arab world. "A peace agreement with other Arab countries is also very important to our future," Olmert said, in a possible reference to Syria. "It is obvious that to open a promising horizon for Israel's tomorrow, we have to make all efforts to moderate, and also to dismantle and remove, the grave security threats clouding our skies." Blair, meanwhile, said that the steps Israel and the PA agreed upon could begin to change the reality on the ground, something he said was critical in giving "credibility" to the diplomatic process. Blair said the four checkpoints slated for removal were the Kvasim checkpoint and Halhoul bridge roadblock, both near Hebron, the container checkpoint south of Ma'aleh Adumim, and the Shavei Shomron checkpoint in Samaria. The checkpoint by Beit El is to be relocated. The first of the checkpoints is to be removed this week, and the others over the next few weeks. Blair said these changes would "significantly free up" north-south traffic in the West Bank, as well as traffic to the east. He pointed out that at this point, the freeing-up of traffic would not be westward, in the direction of the Green Line. Blair said the changes would be done in a phased manner, and that it was an "indication of change I hope will come." "For Palestinian statehood to be possible in the eyes of Palestinians, there must be hope that the occupation will, over time, be lifted," Blair said. "For Palestinian statehood to be possible in the eyes of Israelis, there must be hope, over time, that the security of Israel will be improved and not harmed by the way the Palestinians run their territory." This package, which Blair hammered out in negotiations that extended over weeks and continued until Tuesday morning, was the first tangible result of his efforts since being appointed the Quartet's envoy in June. Blair is scheduled to meet with Bush on Thursday. Blair, at a press conference at his headquarters in the capital's American Colony Hotel, said that the centerpiece of the package was a 360-sq. km. area in and around Jenin - a land mass he said was larger than the Gaza Strip - where the Palestinians were to be given increased security authority and where a number of economic and social projects would begin. Among the projects slated for the area is a German-funded industrial park. He said that this area would be a "pilot," and if the formula worked there, it could be reproduced elsewhere. In addition, Blair said Israel had agreed to let the Palestinians develop certain parts of Area C, the area that, under the Oslo Accords, comprises some 60 percent of the West Bank, but for which Israel retains some administrative and all security responsibility. "It has been a long-standing grievance felt by Palestinians that they have been unable to improve or develop Area C," Blair said. He added that it was extremely important the Palestinians get a chance to develop the Jordan Valley. Blair's plan was panned by Dani Dayan, who heads the Council of Jewish Communities of Judea, Samaria and the Gaza Strip. He said he opposed the removal of the checkpoints, which had been placed in strategically sensitive areas where more security was needed. These checkpoints were put up after numerous shooting attacks by Palestinians against Israelis civilians and soldiers in Judea and Samaria, he said. Dayan accused the government of bowing to international pressure at the expense of Israelis' lives. In a letter he wrote last week to Defense Minister Ehud Barak, Dayan said that any diplomatic steps had to bear in mind the safety of the more than 270,000 Israelis who lived in Judea and Samaria. "We won't agree to any measure that endangers lives," Dayan wrote. Tovah Lazaroff contributed to this report.