Tony Blair has made a direct appeal to Israel's prime minister not to scupper the London peace summit.

Downing Street revealed on Tuesday that the prime minister has written to Ariel Sharon explaining what he hoped the conference would achieve.

The move followed verbal clashes between British and Israeli foreign ministers over the decision by Israel to ban members of the Palestinian Authority from travelling to London.

Number 10 had been forced to admit it may be forced to abandon its plans for the conference although officials are still working on arrangements.

"We are in contact with the Israeli government at the highest level. We are still preparing in the way that we have been preparing. We need to see what comes from our contacts with the Israeli government," said the official spokesman.

Adding a conciliatory note, Downing Street called for reform of the Palestinian Authority to "compliment moves on the wider front" and admitted that Britain would have to "work with the realities on the ground".

Number 10 accepted on Monday that a travel ban on members of the Palestinian Authority enforced by Israel could scupper the London conference, which had been set for the middle of January.

The ban was imposed following a suicide bombing which killed 23 people and two terrorists on Sunday.

The decision to block Palestinian delegates from attending the conference apparently prompted sharp exchanges between the British foreign secretary and his Israeli opposite number.

The Israeli embassy took the unusual step of publishing a transcript of a telephone conversation between the two men.

According to the transcript, Benjamin Netanyahu told Jack Straw that the latest suicide bombings ruled out any chance of business as usual.

He called on Britain to adopt the same position as US president George W Bush "that leaders compromised by terror cannot be partners for peace".

"You in Britain are doing the exact opposite," Netanyahu is said to have claimed.

Straw apparently replied: "No, it is Israel that is doing the opposite. Instead of concentrating on dealing with terrorism, it is striking at [Palestinian] delegates."

There was speculation that Israel's right-wing Likud government moved to hit back at Britain after Tony Blair's decision to hold a Downing Street meeting with the leader of Israel's opposition Labour Party, Amram Mitzna, on Thursday.

The meeting is reported to have angered senior Likud figures, coming as it does in the run up to the Israeli general election on January 28.

Mitzna has pledged to reopen talks with the Palestinians if he wins the election, but polls suggest he is trailing Ariel Sharon despite economic problems and a Likud bribery scandal.