WASHINGTON, Nov 26: Israeli and Palestinian negotiators neared an agreement on Monday on a peace agenda as US President George Bush launched a new drive to restart long-dormant talks to create a Palestinian state.

Expectations were low for three days of meetings in Washington and nearby Annapolis, Maryland, partly because Mr Bush, Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas all face political challenges at home.

President Bush, beginning his biggest attempt at Middle East peace with only 14 months left in office, held Oval Office talks with Mr Olmert and planned a separate session with Mr Abbas later.

Bush told Olmert he was looking forward to a serious dialogue with the two leaders “to see whether or not peace is possible”. He said he was optimistic about the outcome. He is to meet the two leaders together on Tuesday in Annapolis

Olmert said he hoped to launch “a serious process of negotiations”. “This time it is different,” he said, hailing what he described as “very important” international participation in the conference.

Despite long-standing frictions, Israeli and Palestinian officials said they were close to agreement on a joint document that would outline the peace goals to follow this week’s sessions.

A top aide to Mr Abbas, Yasser Abed Rabbo, said: “There will be extensive meetings and efforts in order to reach this document.”

Israeli officials said negotiators had narrowed some of their differences over the document, which will chart the course for negotiating the toughest issues of the conflict — Jerusalem, borders, security and Palestinian refugees.

State Department spokesman Sean McCormack said both sides were “converging” on a document.

Syria and Saudi Arabia have promised to attend the Annapolis talks, joining envoys from more than 40 countries at the U.S. Naval Academy, making the conference one of the most sweeping efforts in years.

A senior Israeli official played down the chances of any direct talks -- or even an exchange of hand shakes -- between Israeli and Saudi or Syrian leaders during the conference.

“They (Arab leaders) won’t do it until they get something concrete from Israel,” the official said.

Washington says the hard work will begin only after this week, when Israelis and Palestinians must tackle the issues at the core of the conflict.

US Secretary of State Condoleezza Rice has put her credibility on the line for the conference. She argues Annapolis would be an opportunity for Israel and Arabs to close ranks against regional “extremism” — an apparent allusion at least in part to Iran’s nuclear programme.

Iran has condemned Annapolis as a ruse for aiding Israel. “All politicians in the world are aware that this conference is doomed to failure,” Iranian Supreme Leader Ayatollah Ali Khamenei said.—Reuters