The US yesterday urged Israel and the Palestinians to work to overcome their differences before an international conference next month even as a top UN expert lambasted the "Quartet" of Middle East peacemakers for failing to promote Palestinian rights.

Condoleezza Rice, the US secretary of state, travelled to the West Bank town of Ramallah to try to persuade the Palestinian president, Mahmoud Abbas, to narrow gaps with Israel on a "declaration of principles" for the conference, provisionally scheduled to be held in Annapolis, Maryland, sometime next month.

Earlier she held talks with the Israeli prime minister, Ehud Olmert, who generated headlines by signalling that outlying Arab areas of Jerusalem could be surrendered in an agreement with Mr Abbas.

Until recently, the question of dividing Jerusalem - annexed after the 1967 war - was a taboo in Israeli politics, and it remains hugely divisive. There were "legitimate questions" about some of these suburbs, he said. But the issue of the city\\\'s holy sites has yet to be tackled.

"Frankly it is time for the establishment of a Palestinian state," Ms Rice said. "The US sees the establishment of a Palestinian state, a two-state solution, as absolutely essential to the future... We have got quite a long time to go but we are not going to tire until I have given my last ounce of energy and my last moment in office."

It is still far from clear, however, whether the Annapolis conference will go ahead. Arab states have said they do not want to attend if it is just a "photo-opportunity." Officials on all sides have hinted that the event could be postponed or cancelled if a positive outcome could not be assured. Palestinians say failure would undermine Mr Abbas and could trigger a new intifada.

And amid the wrangling, there was a reminder of the gap between rhetoric and reality on the ground with a warning from John Dugard, the UN\\\'s special rapporteur on the rights of the Palestinians.

"Every time I visit, the situation seems to have worsened," the retired South African law professor said in a BBC Radio interview. "This time, I was very struck by the sense of hopelessness among the Palestinian people." Mr Dugard attributed this to "the crushing effect of human rights violations", and to Israeli restrictions on Palestinians\\\' freedom of movement.

Israel did face a security threat but "its response is very disproportionate". He said the purpose of some of the hundreds of Israeli checkpoints or barriers in the West Bank was to break it up "into a number of cantons and make the life of Palestinians as miserable as possible".

Mr Dugard suggested the UN should leave the Quartet unless it adopted a more proactive approach to protecting Palestinian rights. The grouping is composed of the UN, US, EU and Russia. The UN "does itself little good by remaining a member of the Quartet". It is "not playing the role of an objective mediator that behoves it".

Mr Dugard\\\'s comments echoed a complaint by a former UN envoy, Álvaro de Soto, in a report leaked to the Guardian in June. At the heart of the issue is whether the international community should be boycotting the Palestinian Islamist movement Hamas, which won free elections in 2006 and took over the Gaza Strip this June, effectively splitting the occupied Palestinian territories in half and vastly complicating already difficult efforts to revive the peace process.

The Quartet, now represented by Tony Blair, is backing the government of Mr Abbas, the Fatah leader, and his prime minister, Salam Fayyad. The Quartet position is that Hamas is a terrorist organisation which will remain off limits unless it renounces violence, recognises Israel and accepts existing peace agreements. Critics say boycotting Hamas is collective punishment that is causing untold suffering in Gaza and ignoring the free will of the Palestinians who voted for the movement.

The UN "should be playing the role of the mediator", Mr Dugard said. "Instead the international community has given its support almost completely to one faction - to Fatah," he added.