Israeli Premier Ariel Sharon met UN Secretary General Kofi Annan on Wednesday and discussed Palestine, Lebanon and the reported expansion of settlements, Annan's spokesman said.

"They discussed regional stability, including the local and regional threat of terror, and talked of the prospects for resuming peace talks," spokesman Fred Eckhard said.

"On the subject of talks, the prime minister emphasised that he would remain flexible, but said he would not compromise on the subject of the security of Israeli citizens," he added.
He said Sharon also "indicated his by now well-known position that he would oppse any UN observers in the Palestinian territories."

The meeting, the third between the two men and their first since Sharon took office on March 7, lasted just over an hour.

It took place amid unusually tight security similar to that put in place whenever a US president visis UN headquarters on the banks of New York's East river.
Eckhard said Sharon briefed Annan on the meeting he had on Tuesday with US President George W. Bush in Washington.
Eckhard said Annan advised Sharon "to ease economic retrictions on the Palestinian authority as a way of easing tensions." Bureau Report