I hope he does decide to make this!! Here's a link to the article in the Sydney Morning Herald:
http://www.smh.com.au/articles/2003/...122263213.html

from Coming Soon:
The Sydney Morning Herald has published a great article talking about how Peter Jackson and The Lord of the Rings production have worked over the last few years. In the article, director Peter Jackson addresses rumors that he was not interested in making The Hobbit as well...

What's next for Jackson? He says he has six or seven ideas for movies, "all of them small." But he denies rumours that he has refused to direct The Hobbit, the first Tolkien Middle-earth book, which served as a prologue to The Lord of the Rings.

"Part of me would love to have somebody else make The Hobbit, so I could watch it as an audience member," Jackson says. "On the other hand, it would feel odd.

"Nobody has asked me to do it, but if they did, I would give it serious consideration."

Visit the link above to read up on how the production works on the last film these days.