updated 5/21/2006 5:08:21 PM ET 2006-05-21T21:08:21

Global business and political leaders focused Sunday on dialogue, democracy and development in the Middle East, although three major players — Iran, Hamas and Syria — were absent, leaving the talks nearly rancor free but with a hollow ring.

The World Economic Forum's regional meeting, however, did succeed in bringing Palestinian and Israeli leaders together for the first time since the Islamic militants of Hamas won Palestinian elections in January.

Iran and its nuclear dispute with the West, Syria and its troubles with the United Nations, and Hamas with its aid boycott by the United States and European Union are among the contentious issues in the region and their absence put those questions on the sidelines.

Iran has been a regular participant at the main World Economic Forum gathering in Davos, Switzerland, but skipped the regional session at Sharm el-Sheik.

The Palestinian invitation to the first of the forum's Middle East conferences to be hosted by Egypt went to President Mahmoud Abbas, who is at loggerheads with the Hamas-led government.

Syria, under suspicion in the assassination of a former Lebanese leader and accused of not doing enough to stop insurgents from crossing into Iraq, also stayed away.

The lack of participation may have been for the best, forum chief Klaus Schwab said.

"The principle of the World Economic Forum is dialogue, positive dialogue. At the moment, regrettably, I think the situation is such that we could not feel we can make a specific contribution at this meeting for better understanding, for better relations," he said at a news conference Saturday.

Participants in forum symposiums Sunday talked about ways to increase regional dialogue and expand democracy in Arab nations, although the discussions sometimes butted into regional realities.

Egyptian Prime Minister Ahmed Nazif insisted his government already engages in dialogue, saying elections and parliamentary debates are a kind of dialogue as Egypt engages in a process of reform.

But Egyptian authorities have virtually gutted the moderate opposition. And police and security forces used violence against supporters of the fundamentalist Muslim Brotherhood to keep them from reaching polling stations during parliamentary elections late last year.

Egyptian security forces also cracked down twice in two weeks on anti-government protesters in Cairo, beating them and throwing hundreds in jail. The U.S. responded with an unusual public criticism of its longtime close Arab ally.

Lebanese Prime Minister Fuad Saniora said the dialogue among his country's feuding political factions could be used as an example for other Arabs. Yet the talks have failed to produce accords on other major contentious issues.

Saniora did not talk about his government's virulently anti-Syrian stance and the deep split between his supporters and those allied to Syria, which kept its army in Lebanon for nearly 30 years before withdrawing last year under heavy international and domestic Lebanese pressure.

Meanwhile, the Palestinian president met on the fringes of the conference with Israeli Foreign Minister Tzipi Livni and Vice Premier Shimon Peres. Abbas said he told Livni that the two sides must restore regular contact and work toward resuming peace talks.

Israeli officials said the two discussed preparations for a summit between Abbas and Israeli Prime Minister Ehud Olmert once Olmert returns from a trip to Washington.

The Israeli-Palestinian conflict also took up discussion time elsewhere at the conference.

Explaining the U.S. financial boycott of the Hamas government, Sen. Gordon Smith, R-Ore., said that while America respects elections, "we disagree with the policy of exterminating political opposition and exterminating one's neighbor and don't feel an obligation to support financially those kind of policies."

Hamas has rejected U.S. and European demands to renounce violence and accept the right of Israel to exist.

The Arab League's secretary-general, Amr Moussa, defended the Hamas-led government.

"Have we given this government a chance?" he asked. "From day one they are under siege, blocked, attacked, no money should be transferred to them. Just put yourself in their place."

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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