(Agencies)
Updated: 2007-10-16 09:20

RAMALLAH, West Bank - Saying the time is now for a Palestinian state, US Secretary of State Condoleezza Rice on Monday prodded Israel and the Palestinians to agree at a US-sponsored conference this fall on how and when to start formal peace talks.

Palestinian President Mahmoud Abbas, right, shakes hands with US Secretary of State Condoleezza Rice, following a joint media conference at Abbas' headquarters in the West Bank city of Ramallah, Monday, Oct. 15, 2007. [Agencies]

In one of her strongest statements yet on the issue, Rice declared that creation of a Palestinian state is a key US interest and urged the two sides to drop contentious demands and reach consensus on a substantive joint statement ahead of the international conference.

"Frankly, it's time for the establishment of a Palestinian state," Rice told a news conference with Palestinian Authority President Mahmoud Abbas, who she saw on the second of a four-day intense Middle East shuttle diplomacy mission.

"The United States sees the establishment of a Palestinian state and a two-state solution as absolutely essential for the future, not just of Palestinians and Israelis but also for the Middle East and indeed to American interests," she said.

"That's really a message that I think only I can deliver," Rice said, explaining her mission to prepare for the conference to be held in Annapolis, Md. as early as late November.

The secretary is facing daunting challenges in trying to bring the two sides close enough to make the conference worthwhile.

Rice, who expects to return to the region at least once before the conference takes place, played down the chances for any breakthroughs before she traveled here.

Rice met with Israeli officials on Sunday and will see both sides again on Wednesday after visiting Egypt on Tuesday and finally traveling to London to meet Jordan's King Abdullah II in a bid to build support for the meeting among skeptical Arab nations.

In her talks in Jerusalem and the West Bank, she is seeking to bridge wide gaps between Israel and the Palestinians over the declaration to be endorsed in Annapolis that President Bush hopes will lead to negotiations for a final settlement of the long-running conflict.

Israeli Prime Minister Ehud Olmert has said he does not see the document as a prerequisite for the conference. He wants it as vague as possible on critical so-called "final status issues" like the borders of a Palestinian state, the status of disputed Jerusalem, Israeli settlements and Palestinian refugees.

The Palestinians, meanwhile, have said they will not attend the conference without a document that contains details on these matters as well as a specific timeline for their resolution. Arab states share the Palestinian concerns.

"No doubt that before we go to (the conference), the document will be ready," said Abbas, whose authority has been limited to the West Bank since the militant Hamas movement seized control of the Gaza Strip in June.

"The negotiations should not be open-ended, but subject to a certain time period," he added.

Standing next to Abbas in the West Bank city of Ramallah, Rice insisted the conference will be "serious and substantive."

"We frankly have better things to do than invite people to Annapolis for a photo op," she said in the first public confirmation from a US official that Washington has chosen the Maryland capital as the venue for the meeting.

Speaking to reporters at her Jerusalem hotel after seeing Abbas, Rice declined to reveal her private discussions with Israeli and Palestinian officials but suggested that neither side would get its way in their demands for the joint statement.

"I am not certain that a timetable that says we have to complete X by Y time is where we want to go," she said when asked about the Palestinian demand for deadlines.

"We're talking about ways to demonstrate continued momentum if and when they begin formal negotiations but we haven't come to any conclusions at this point," Rice said.

She also said the joint statement "does not have to be detailed in order to be serious (or) substantive."

At the same time, she said that despite Israeli reservations, the document would have to include references to the final status issues.

"If it's going to address the establishment of a Palestinian state, then it has to address core issues," Rice said. "You do have to have enough that is concrete so that people know that we're not just starting out with the general principle that everyone would like to have a Palestinian state."

She also defended the plan for the conference, which some critics believe Bush called prematurely when he announced in July that it would be held in the fall - a year before the next presidential elections.

"I understand as well as anybody that there are risks to announcing a meeting and then doing the hard work to get it prepared," Rice said. But the other side of that ... something had to spark their active and intensive engagement, something had to spark the region to take advantage of what was a slowly opening historic opportunity."

Palestinian officials had expressed disappointment with Rice's less-than-optimistic comments on Sunday and in her meeting with Abbas she sought to reassure the Palestinians of the US commitment to peace.

"We have come a long way," she said. "We have got quite a long way to go, but we are not going to tire until I have given it my last ounce of energy and my last moment in office."

Also Monday, the Israeli and Palestinian teams charged with drafting the pre-conference document were to meet in Jerusalem, Qureia's office said. The teams had met only once before.

At the same time, Olmert hinted Monday that he is ready to share control of Jerusalem, saying for the first time that Israel could do without controlling some of the holy city's outlying Arab neighborhoods.