"It seems that the two sides ... have so far failed to bridge the divide.
 
"The Israelis are keeping it very vague - they don't want it to be too concrete, while the Palestinians are saying they want all the core issues to be there: the status of Jerusalem, the borders, the right of return and the halting of settlements."
 
Cairo talks
 
Following talks with Rice in Cairo on Tuesday, Egypt said it was encouraged about the prospects of the Middle East meeting.
 

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"We are encouraged by what [Rice] said and we promised to help her and help other parties reach this objective, which is launching negotiations leading to a Palestinian state," Ahmed Abul Gheit, the Egyptian foreign minister, said.

  

"The secretary helped us today to understand the American position and she shed lots of light on American efforts between the Israeli and Palestinian parties," he said during a news conference with Rice.

  

Rice described her talks as "very fruitful".

 

Rice's intense shuttle diplomacy is seeking to advance the stalled Middle East peace process after nearly seven years of deadlock and to prepare for an international Israeli-Palestinian meeting in Maryland next month.

 

No delay

 

On Monday, Abul Gheit had suggested it might be better to delay the talks if a "substantive and positive document" were not already on the table.

  

Rice dismissed suggestions of delaying the conference, saying "we have not set a date for the meeting so it's a little hard to postpone something for which you have not set a date".

  

A US State Department official said Rice had gained Egyptian support for the conference.

 

"They [the Egyptians] know the indicators well so when they say they are discouraged or encouraged I think it is a pretty good barometer," the official told reporters travelling with Rice on the aircraft from Cairo to Tel Aviv.

 

Thorny issues

  

Although the Israelis and Palestinians disagree over what exactly should be on the table at the US-sponsored conference, Rice said on Monday that a two-state solution to the decades-old conflict was essential.

  

"Frankly it is time for the establishment of a Palestinian state," she said after four hours of talks with Abbas in the occupied West Bank.

  

The United States has still not set a date for the conference, with Rice saying simply "there are only two months left this fall, that's November and December, so we are working very urgently toward getting to that meeting".

  

Israeli and Palestinian disagreement on the content of a joint document, which negotiating teams are drawing up to serve as a basis for the talks, has been seen as a possible cause for delay.

  

The Palestinians want a detailed agreement and timeframe for implementing solutions to the conflict, while the Israelis want a vague document with core issues left until after the conference.

 

Key issues are those of a future Palestinian state's borders, the status of Jerusalem, Palestinian refugees, Jewish settlements and water.

  

But Olmert and Rice oppose a timetable for solving the thorniest problems of the conflict.