French President Nicolas Sarkozy put himself forward on Monday as a possible Middle East peace broker, offering in a speech to Israel's parliament to help reach agreement and mobilize French troops if necessary.

"I ask you to trust us because we want to help you," said Sarkozy, the first French president to address the Knesset since Francois Mitterrand in 1982.

Since taking office a year ago, Sarkozy has broken rank with his predecessors by repeatedly describing himself as a "friend of Israel", fostering closer ties with the Jewish state and reiterating that there can be no compromise on its security.

"France is ready to provide its guarantee, ready to mobilize its diplomatic service, its resources, its soldiers," he said, without specifying what role French troops could play.

Sarkozy said peace with the Palestinians was possible if Israel stopped all settlement activity, lifted the checkpoints that criss-cross the West Bank, ended a blockade of Gaza and accepted Jerusalem as capital of two states.

"Create the conditions for movement," Sarkozy told lawmakers, urging them to back a proposal for settlers to leave the West Bank in return for compensation and rehousing in Israel.

"There can be no peace without a halt to settlement activity," he said, condemning "terrorism" and telling Israel it was not alone facing what he said was a military Iranian nuclear program.

Israel has said it will press ahead with construction in settlement blocks it intends to keep in any final peace deal with the Palestinians. Palestinians fear such settlements will deny them a viable state in the West Bank.

In a welcome address, Olmert praised Sarkozy but, in an apparent allusion to the dispute over settlement expansion, added: "Not always do we see eye to eye on every detail."

Palestinian President Mahmoud Abbas welcomed Sarkozy's comments on settlements and Jerusalem, a senior aide said.

"It's a speech that the Israeli leaders need to listen to," Saeb Erekat said.

OPENING

In a part of his speech prepared for delivery, Sarkozy said he was prepared to host various peace talks. Although he did not pronounce it, a senior French official said he stood by it.

"(France) is ready to organize on its soil all the talks that could lead to (peace), whether in Israeli-Palestinian negotiations, the Syrian-Israeli dialogue, or the talks that will have to resume, one day soon I hope, between Israel and Lebanon," the text said.

France takes over the European Union's rotating six-month presidency on July 1, and as such will be a member of the Quartet of Middle East peace negotiators, along with Russia, the United States and the United Nations.

It was not clear how any facilitation of talks by Sarkozy would affect the Quartet's envoy, Tony Blair.

During his three-day state visit to Israel, which began on Sunday, Sarkozy has said an Israeli-Palestinian deal could be reached soon, a more optimistic view than most observers, who point to Olmert's weakness at home and divided Palestinians.

Despite deep public skepticism, the United States, the main broker in talks between Olmert and Palestinian President Mahmoud Abbas, hopes that a framework statehood deal can be achieved before President George W. Bush leaves office in January.

An official close to Sarkozy said preoccupation with the U.S. presidential election campaign created "a sort of an opening for anyone who wants to head into it" in efforts to aid talks.

"The president's visit could give an indication of who could, in the coming months, say 'why not create a bigger role for the European Union under France's presidency?'," he said.