After meeting Powell despite objections from Israel, former Israeli justice minister Yossi Beilin and Palestinian ex-information minister Yasir Abd Rabbu pledged to press on with their Geneva Initiative.
"We were today encouraged by the words of secretary Powell, as we were yesterday encouraged by the words of the president, when he described the Geneva accord as being constructive," Abd Rabbu said.
Beilin said the plan was an attempt to build "a coalition of sanity against a coalition of extremists who are rejecting any peace initiative."
"We believe that this debate is a most helpful one and the most healthy one," he told reporters outside the State Department.
US President George Bush said on Thursday the Geneva plan could only be productive if it adheres to the principles of the US-backed road map for Middle East peace.
Abd Rabbu argued after meeting Powell that the Geneva Initiative was designed to compliment the road map and to help with its long-delayed implementation.
"This document is intended to help the road map be implemented and to strengthen the credibility of the road map in front of the Palestinian public and the Israeli public and the region as a whole," he said.
Colin Powell says the Geneva plan is 'constructive'
Deputy State Department spokesman Adam Ereli described the meeting as "good" and "constructive" but reiterated that the United States still believed that implementing the roadmap was the way to peace.
Powell told Beilin and Abd Rabbu that the roadmap "provides the appropriate pathway for moving to the realization of (Bush's two-state Middle East) vision and that there are no shortcuts along the way," Ereli said.
"The secretary stated that the United States remains actively engaged in promoting peace and hopes that private citizens' activities will improve cooperation between Israelis and Palestinians," he said.
Beyond the road map
Friday's closed-door meeting also included the top US diplomat for the Middle East, William Burns, and Elliott Abrams of President George Bush's National Security Council, officials said.
The road map calls for an end to Palestinian violence, an end to Jewish colonisation of Palestinian territories as key stages to the creation of a Palestinian state by 2005.
Hamas activists burn effigies of Beilin and Abd Rabbu during a West Bank demonstration
The Geneva Initiative goes further by making proposals for resolving some of the thorniest problems in the Palestinian-Israeli conflict, such as the status of Jerusalem and the return of Palestinian refugees.
On Friday the Swiss flag and effigies of the Geneva plan's architests were burned in a West Bank rally organised by the hardline Palestinian Hamas movement, which has denounced the accord for its de facto renunciation of the right of return of Palestinians forced out of their homeland when the state of Israel was created in 1948.
Israel's prime minister Ariel Sharon has also rejected the initiative. His government had said Powell's meeting with Beilin and Rabbu would be a "mistake."
The road map has been accepted by the Palestinian Authority, while Sharon has given only guarded approval.