The situation in the Gaza Strip cannot continue, Prime Minister Ehud Olmert told Jordan's King Abdullah on Tuesday in Aqaba, hours before a barrage of Kassam rockets hit Sderot. Olmert, according to sources in his office, told Abdullah there was a limit to the restraint Israel could show in the face of the Kassam attacks and Hamas's build-up in Gaza. Abdullah, who also expressed concern about the worsening security situation in Gaza, discussed with Olmert ways to strengthen Palestinian Authority Chairman Mahmoud Abbas. He called on Israel to release to the PA hundreds of millions of shekels in frozen tax revenue. Olmert's response was that this would only take place after Israel received assurances the money would be used for humanitarian needs, and not go to terrorists, sources in Olmert's office said. Abdullah protested settlement expansion in the West Bank. Olmert responded that Israel was neither building new settlements nor expanding them beyond their existing construction lines. He reiterated Israel's commitment to remove illegal settlement outposts. Olmert and Abdullah met alone for 30 minutes, and then were joined by their staffs for another hour of talks. Before going to Aqaba, the two leaders took part in the Nobel Laureate conference being held in Petra. At that forum, Olmert - in reply to a question asked by Elie Wiesel, one of the organizers of the conference - painted the Arab Peace Initiative in a positive light, inviting the Arab League's 22 leaders to Israel to talk about the plan. And if the Arab leaders would not travel to Jerusalem to meet him, Olmert said, then he would be ready to go to them. "We heard about the Arab peace initiative and we say, 'Come and present it to us. You want to talk to us about it, we are ready to sit down and talk about it carefully,'" he told the conference. Describing the plan as "very interesting," Olmert said: "We are ready to cooperate to find the appropriate manner to implement it. If the Arab countries want to present their peace initiative, we will be more than happy to sit down and listen carefully." The plan calls for a complete Israeli withdrawal to the pre 1967-border lines, in exchange for a normalization of ties with Israel. It also calls for a return of Palestinian refugees to Israel. "If Hamas agrees to abide by the Quartet's conditions, we will agree to sit with them around the negotiating table," Olmert said. But Hamas was "an obstacle to peace, since it refuses to recognize Israel," he added. Vice Premier and Nobel Laureate Shimon Peres also addressed the conference, and was effusive in his praise of the Arab Peace Initiative, calling it "music we haven't heard for 100 years." He said the plan should be seen "positively," and that Israel was willing to negotiate over the document and "leave most of the territories," on condition that there was a recognition of Israel, terrorism stopped and there was a "fundamental and deep" change in Hamas and Fatah's behavior. "If that would happen, we could achieve peace in 24 hours," Peres said. Olmert took former PA minister Yasser Abed Rabbo to task for calling on Israel at the conference to "end the occupation," reminding him that Israel had left the Gaza Strip and uprooted settlements in 2005. "Why did you shoot at us?" he said. "We are also willing today to leave territories in the West Bank, but can you guarantee that they will not fire on us the day we leave?" In response to Rabbo's comments that the Palestinians were commemorating on Tuesday the Naqba, or "catastrophe" of Israel's birth, and in a few days would mark the 40th year anniversary of the Six Day War, Peres said Israel did not intend to conquer the territories or hold them. "When we are attacked, we need to defend ourselves," he said.