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Israel and Egypt hold unusual high-level talks on Wednesday amid signs that Israeli Prime Minister Ariel Sharon might take unilateral steps to break a Middle East stalemate with the Palestinians.

Both Egypt, the key Arab intermediary in the conflict, and the United States, main sponsor of a "road map" peace plan, were likely to take issue with Israeli unilateralism as it could strip away territory Palestinians seek for an independent state.

Sharon hardened hints on Tuesday that he would order some Jewish settlements in occupied territory evacuated for security reasons, raising not only a furor in his right-wing coalition but confusion and concern in Washington.

U.S. officials said any summary move to impose a peace arrangement would not work. "We don't consider that to be a viable solution...that would add to the security and safety of Israel," one official told reporters.

Any unilateral pullback by Israel would probably lay down de facto borders along an internationally condemned barrier Israel is building inside the West Bank, leaving Palestinians with a much smaller state, truncated into cantons, than they envisaged.

Egypt wants Israel to cede all West Bank and Gaza territory seized in the 1967 Middle East war for a Palestinian state, and end chronic conflict with the Arab world as called for by a 2002 Saudi peace plan. Sharon rejected it on security grounds.

Israeli Foreign Minister Silvan Shalom was to meet Egyptian President Hosni Mubarak in Geneva on Wednesday to discuss how to revive the "road map" process with Palestinians, stymied by mutual violence and intransigence over issues like borders.

It would be the highest-level Israeli-Egyptian meeting since Sharon began his second term of office in March 2003.

An Israeli Foreign Ministry statement said the talks "signify a warming of relations between Israel and Egypt."

Egypt was the first Arab country to sign a peace treaty with Israel, in 1979, followed by Jordan in 1994. But Israel's ties with Cairo have been generally strained over the years against the backdrop of Israel's intractable conflict with Palestinians.

An aide to Shalom said Mubarak would be asked to send an ambassador back to Israel. Egypt withdrew its envoy in November 2000 to protest at Israel's crackdown on a Palestinian uprising that erupted after U.S.-brokered peace negotiations focusing on Palestinian statehood collapsed earlier that year.

Egypt failed last week to mediate a deal between Palestinian militant factions to cease attacks on Israelis. A cease-fire is needed as a basis for serious negotiations on the "road map."

Sharon's deputy Ehud Olmert told Israeli television on Tuesday that the Jewish state could not tolerate indefinite Palestinian violence and "we may have no choice but to take unilateral steps and determine a realistic separation line."

But he ruled out splitting Jerusalem into two capitals or "returning to the 1967 lines," as Palestinians demand.

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