Israel held its first public talks with Pakistan in a diplomatic breakthrough spurred by its Gaza pullout that signaled a possible thaw in relations with longtime foes in the Muslim world. Pakistani Foreign Minister Khursheed Mehmood Kasuri said after a high-level meeting in Istanbul that his country had decided to "engage" with Israel after years as one of its harshest critics over its handling of a Palestinian uprising.

Speaking after talks with Kasuri, Israeli Foreign Minister Silvan Shalom said Israel hoped the meeting would "finally lead to a full diplomatic relationship with Pakistan as we would like to see with all Arab countries."

"We made a huge breakthrough today," Shalom said. "We think it will be a very positive signal to Israeli and Palestinian public opinion that there are some fruits from this withdrawal from Gaza."

But Pakistani President Pervez Musharraf said Islamabad would not recognize Israel until a Palestinian state was created. Palestinian Deputy Prime Minister Nabil Shaath said it was premature to offer diplomatic "gifts" to the Jewish state.

Israel has full diplomatic ties with four major Muslim countries - Egypt, Jordan, Turkey and Mauritania - and limited interest or trade missions with Morocco, Tunisia and Qatar.

In a further sign of easing tensions, Jordan's King Abdullah II was expected to visit Israel as early as next week to underscore his support for the Gaza pullout, a senior Israeli diplomatic source said.

Kasuri said Pakistan, in consultation with the Palestinians and Saudi King Abdullah, had decided to holds talks with Israel because of what it saw as the beginning of the end of Israel's occupation of the Palestinian territories.

However, the Palestinian Authority said it was "worried" about the Pakistani-Israeli meet.

"It is not good to give Israel gifts before it really implements the peace process, not only in Gaza, but in Gaza, the West Bank and Jerusalem," said Palestinian Deputy Premier Nabil Shaath.

"The right time for this relationship with Israel is after Israel withdraws from ... all land occupied in 1967 and solves the refugee issue," Shaath said, adding that he though Palestinian President Mahmoud Abbas was of the same opinion.

The Palestinian militant group Hamas also urged Pakistan to reconsider its decision.

U.S.-led mediators see Israel's first removal of settlements on occupied land Palestinians want for a state as a possible catalyst for renewed peacemaking after nearly five years of violence.

Israel completed evacuating 9,000 settlers from Gaza and the northern West Bank on August 23 under Premier Ariel Sharon's "disengagement" plan.

Israel plans to withdraw its troops from the Gaza Strip by September 15, security sources said about a move likely to be facilitated by Thursday's signing of a deal with Cairo to deploy 750 Egyptian border police along the Gaza-Egypt frontier.

Sharon has said that Israel intends to keep large West Bank settlement blocs, where the vast majority of Israel's 245,000 settlers live - a stance that has angered Palestinians.

Jewish settlers have accused Sharon of surrendering to Palestinian violence in carrying out the Gaza pullout. He may use the thaw with Pakistan to shore up Israeli support in his bitter leadership fight in his rightist Likud party.

Thursday's talks came ahead of Musharraf's plans to address American Jewish leaders at an interfaith meeting organized by the Council for World Jewry during his visit to New York later this month to attend the UN General Assembly.

Analysts believe a key Pakistani motive is to moderate growing military ties between Israel and India, which forged relations in 1992. Pakistan and India have been at odds for decades over the territory of Kashmir.

Pakistan's main Islamic opposition party denounced the decision to begin diplomatic engagement with Israel, and said it would hang out black flags in a day of protest against the move.

Pakistan has been a staunch supporter of Palestinian demands for Israel to end its occupation of the West Bank and Gaza, which it captured in the 1967 war and is now the home to 3.8 million Palestinians.

Diplomats say Israel and Pakistan have held informal contacts in recent months.

In 2001, at the time of Sharon's election as prime minister, Musharraf said the new Israeli leader might be the only person who could take decisions leading to peace in the Middle East.