Foreign Affairs Minister Peter MacKay met with Israeli Prime Minister Ehud Olmert on Monday on the final stretch of his first foray into the Middle East.

"According to MacKay's advisors, the discussions were rather general on the peace process," said CTV's Janis Mackey Frayer in Jerusalem.

"They talked about building economic links between the two countries, trying to discuss the kind of role Canada might play in the prospective peace process and there was also praise for Canada for its support of Israel during the summer war with Hezbollah."

MacKay also toured the northern border between Lebanon and Israel for a first-hand look of towns that had come under attack by Hezbollah.

"This is a very politically-sensitive part of the world so the minister has been doing a lot of listening and not a lot of talking," Frayer said of MacKay's first visit.

On the weekend, MacKay met with Israeli Foreign Minister Tzipi Livni.

"She's a moderate player and she's one of the voices that is becoming much stronger with the prospect of renewed negotiations," said Frayer.

Livni's vision of the two-state solution is two separate homelands -- a Jewish homeland and a Palestinian homeland. But the solution doesn't seem to address the Palestinian right of return, said Frayer.

"The right of return dates back to the Arab-Israeli wars where Palestinians had been displaced from or forced from their homes in what is now modern-day Israel. Many of them are counting on the prospect of returning to those homes and this has been at the heart of the conflict and certainly at the heart of what Palestinians want to achieve in any final status negotiations on a Palestinian homeland," she said.

But Livni said Sunday that "Israel is not the answer for the refugees."

After the statemenet, MacKay nodded -- implying he agreed there should be no right of return -- and then refused to clarify.

While Livni has been proposing temporary borders, MacKay said Sunday that the border should not be permanent until confirmed in final status negotiations.

"She (Livni) has given me assurances that throughout the borders are issues that have to be discussed in the broader context of peace negotiations,'' he said.

Meeting with Palestinians

On his trip to the West Bank, MacKay also met with a Palestinian civilan affected by the Conservative government's decision to cut off funding to the Hamas-led government.

Touring the refugee camp in the shadow of the security barrier, MacKay described the situation as "clearly very tragic conditions."

After being shunned by MacKay, Palestinian foreign minister Mahmoud Zahar said Sunday that Canada is at risk of becoming an enemy of his people.

MacKay didn't meet with Zahar as Canada forbids diplomats from dealing with the Hamas-led Palestinian Authority.

After Hamas won elections last year, Canada took the lead within the international community by suspending aid to the government.

"I would ask him very simply: What is the moral basis for these sanctions and boycott?" Zahar told The Globe and Mail, adding that the sanctions have mostly hurt ordinary Palestinians and not the Hamas government.

Zahar said the stance of the Canadian government could stir resentment among the broader Islamist movement.

"What is Israel providing you? Nothing. What are you achieving from such policies? What have you gained? Nothing, except the hatred of innocent people. If you would like to be the tail of the American dog, it's up to you. Or you can be a leading country, a linkage," he said.

"For the sake of the future -- one, two or three decades from now -- the only way to help everybody, everywhere is to co-operate with the Islamic movements and Arabic countries because they are not your enemy."

Reports emerged last week that Ottawa is planning to resume aid to the region.

MacKay did meet separately over the weekend with Palestinian President Mahmoud Abbas.

MacKay also met with his Jordanian counterpart Abdul-Ilah al-Khatib, and Prime Minister Marouf al-Bakhit. His trip also included a visit to the Yad Vashem Holocaust memorial in Jerusalem.

With a report from CTV's Janis Mackey Frayer and files from The Canadian Press