Prime Minister Ehud Olmert is misleading the Israeli public by declaring that "significant progress" has been achieved in the peace talks with the Palestinians, Palestinian Authority officials claimed Thursday. They also expressed fear that Olmert's resignation would delay a peace agreement between the two sides. The officials said they were surprised to hear after this week's meeting in Jerusalem between Olmert and PA President Mahmoud Abbas about the "significant progress" that had been allegedly achieved during the talks. They said the announcement by Olmert's office was aimed at "misleading" the Israeli public and creating an illusion about the peace process. "This is a big lie," one official told The Jerusalem Post. "The statement was issued by Olmert's office even before President Abbas returned to Ramallah and it came as a surprise to us. We still don't know what progress he's talking about." Another PA official said he was convinced that the "optimistic" announcement was aimed at diverting attention from the police investigation into the new financial scandal involving Olmert. "If Olmert has problems with the police because of financial corruption, that's his problem," he said. "But he should not use the peace talks as an excuse to divert attention from the police inquiry." The official said that at the meeting in Jerusalem, the Palestinians had not sensed any real changes in Israel's position. "We can't talk about any changes," he said. "The only thing that happened was an exchange of views regarding the future borders of the Palestinian state." PA representatives expressed fear that the latest scandal would have a negative impact on the peace talks with Israel. However, they stressed that the PA would continue to negotiate with the Olmert government as long as he remained in power. They also expressed fear that Olmert would embark on a massive military operation in the Gaza Strip in a bid to divert attention from the police inquiry. "We don't rule out the possibility of an escalation in the Gaza Strip or the West Bank," said chief PA negotiator Saeb Erekat. "We hope the latest developments in Israel won't be used to escalate the situation." Erekat said the PA was following very closely the developments surrounding the police probe, although the Palestinians consider it an internal Israeli affair. "Any peace agreement will be postponed if new elections are held in Israel," he said. "If Foreign Minister Tzipi Livni takes over, we will continue to negotiate with her."