Tzipi Livni, the Israeli foreign minister, told the Palestinian newspaper Al Ayyam that "it was impossible to accept" the Saudi-inspired peace plan launched at the Beirut Arab League summit five years ago "in its current formulation".

The importance Israel has attached to the Riyadh summit, which will review and, according to Israeli sources quoted in Ha'aretz yesterday, possibly modify the peace plan, appeared to underline the increasingly pivotal importance of Saudi Arabia's King Abdullah in the diplomacy of the region. The Iranian President, Mahmoud Ahmadinejad, is expected to make a rare visit to Saudi Arabia for talks with the King today, inviting speculation that the two leaders will discuss issues on which both have been increasingly at odds, not least Iraq and Lebanon.

Ms Livni's warning about the details of the Saudi initiative on the Israel-Palestinian conflict, as approved in Beirut, comes three months after the Israeli Prime Minister Ehud Olmert said there were "positive elements" in the plan, which provided for pan-Arab recognition of Israel in return for an Israeli withdrawal to 1967 borders.

Ms Livni used her interview, and another one with the Israeli Channel Ten to distinguish between "parts [of the plan] that are acceptable to Israel and what seems to us like an absolute red line." She made clear that the latter category included the plan's clause on the return of refugees whose families were displaced in 1948 "in accordance with UN Resolution 194."

While the resolution provides for recognition of a right of return for refugees to Israel, Ms Livni reiterated her view that this was incompatible with the goal of a two-state solution. Israel has long made it clear that it would only accept the return of refugees to a future Palestinian state.

Israeli officials were also concernedthat the reference to Israeli withdrawal to 1967 borders did not stipulate that the actual borders would be subject to negotiation. They argued that on the right of return, King Abdullah's original formulation before it was hardened up in the Beirut summit had been silent on whether any return would be to Israel or a Palestinian state.

Despite Saudi Arabia's role as a US ally, both the Bush administration and Israel have expressed concern about the Fatah-Hamas deal it brokered in Mecca because it does not provide for explicit recognition of Israel, a renunciation of violence, and an honouring of past Palestinian agreements with Israel.

The deal was depicted in some quarters as making it more difficult for the US Secretary of State Condoleezza Rice to persuade Mr Olmert to open discussions on the outlines of a final peace settlement with the Palestinian President Mahmoud Abbas because Hamas's participation in the planned coalition government gave him a reason for not doing so.

But Israel has been reluctant publicly to denigrate Saudi Arabia, whose national security adviser, Prince Bandar bin Sultan, is widely believed to have held secret talks with Mr Olmert in Jordan in November. Some in the US administration have also been reported to see Saudi Arabia as a potential Sunni bulwark against the influence of Shia Iran.

Mark Regev, the Israeli Foreign Ministry spokesman, said that "over the past few months the Saudi role has been positive".

Mr Regev said on the forthcoming Arab summit that with a "dysfunctional" Palestinian Authority and tensions between different factions, it was desirable that "moderate Sunni Arab states" should "very solidly get behind pragmatic Palestinians".

Asked whether that meant advancing a peace process or merely strengthening Fatah in relation to Hamas, Mr Regev would only say: "We'll have to wait and see what happens."