Acting Prime Minister Ehud Olmert urged the Palestinians Tuesday - on the eve of elections to the Palestinian Legislative Council -- not to leave their fate in the hands of extremists. "In 1947, the Palestinians rejected the offer to establish a country," Olmert said at the Herzliya Conference. "History has provided them with another opportunity to establish an independent state. The actualization of this opportunity involves relinquishing some of their national dreams, just as we have relinquished some of ours." The 30-minute address, Olmert's first diplomatic speech since filling in for Prime Minister Ariel Sharon, laid out the parameters of a diplomatic plan that stayed true to Sharon's policies. Olmert talked about the need to ensure a Jewish majority in Israel, even at the cost of withdrawing from parts of the Jewish historic homeland. He pledged allegiance to the road map, and reiterated Israel's commitment under the plan to limit building in the settlements, dismantle unauthorized outposts, and improve the quality of life for Palestinians. He also, like Sharon, made clear that nothing would move diplomatically until the Palestinians fulfilled their road map commitments as well: dismantling all terror organizations, confiscating illegal weapons, enforcing law and order, stopping incitement and implementing government and financial reforms. "The key to moving the political process forward is for the Palestinians to abandon the path of terror," he said. "This is not a matter for words, statements and empty promises - we had our fill of those in the past." While Olmert said he hoped that the elections would result in a government headed by PA chairman Mahmoud Abbas, he intimated that he was not afraid of Hamas. "I am not a partner to all the doomsayers who are already telling us how hard and horrible it will be here after the elections in the PA," he said. "Israel will know how to operate and act in any circumstance, faced with any scenario, in order to preserve its security and political horizons, and advance the hope for a changed reality." Olmert tacitly acknowledged in public for the first time that Sharon would not be returning to office. "The government of Israel, under my leadership, will insist on the fulfillment of the road map, in all its phases, exactly as was agreed," he said. Unlike Sharon, who had said repeatedly after the disengagement from Gaza there would not be any further unilateral disengagement, Olmert did not rule it out. He said that while Israel would "prefer an agreement" with the Palestinians, "if our expected partners in the negotiations in the framework of the road map do not uphold their commitments, we will preserve the Israeli interest at all cost." Olmert said that the "most dramatic and important step" Israel faced was shaping the permanent borders of the country in order to ensure a Jewish majority. He said that a "clear boundary" reflecting the demographic reality on the ground needed to be created "as soon as possible." But, like Sharon, Olmert - though adamant about the need to keep a "united Jerusalem" - kept very vague the details of where exactly he thought those boundaries should run. "Israel will maintain the security zones, the Jewish settlement blocs, and those places which have supreme national importance to the Jewish people, headed by a united Jerusalem under Israeli sovereignty. There can be no Jewish state without the capital of Jerusalem at its center," he said. Giving up parts of the Land of Israel, which he stressed is the historic right of the Jewish people, is not tantamount to relinquishing the Zionist dream. Rather, Olmert said, the essential realization of the Zionist goal was "ensuring the existence of a Jewish and democratic state in the Land of Israel." Olmert also stressed a theme that he has repeated a number of times during the last three weeks, that Israel would dismantle the unauthorized outposts and "not be deterred by the threats of a minority of hooligans." He said he already gave clear directives in this regard, and that the country would "forcefully defend the value of the rule of law, even when attacked from within." Olmert, who is also the finance minister, dedicated a few minutes of his address to economic issues, saying that while the country showed great economic progress last year, much more must now be done to narrow social gaps in the country. He also paid homage throughout the speech to Sharon, calling him one of the country's "greatest commanders" who "prioritized initiative over inaction," and knew "it was better for Israel to initiate political steps rather than be dragged into dangerous moves forced on it by others." "From here, I send my wishes for a speedy recovery to the man who, over the past five years, led us into a reality in which the chances for a future are better," Olmert said, at the conclusion of his speech. "I hope that, God willing, we will be able to stand before him and tell him: 'we have walked in your light'." He received a standing ovation.