Israel is prepared to make a joint declaration with the Palestinians at the international peace conference scheduled to take place next month in Annapolis that will address the core issues of Jerusalem, refugees and permanent borders, a senior government official told Haaretz yesterday. Palestinian officials demanded Israel commit to a timetable for negotiations.

The senior source in Jerusalem said that U.S. Secretary of State Condoleezza Rice, who is currently visiting the region, had reached an agreement with the Palestinians stating that "the declaration will address all core issues and point to certain avenues to be pursued through negotiation." The official added, however, that the declaration will not offer solutions to any of the aforementioned core issues.

But Rice's dealings with the Palestinian leadership in Ramallah seems to have hit a bump, after she reportedly told the Palestinians that Israel will not commit to a timetable for negotiations. Palestinians sources also said that Israel will not have the so-called Right of Return - the Palestinian demand that they be allowed to return to Israel proper - mentioned in the document.

Palestinian officials told Haaretz yesterday that Palestinian President Mahmoud Abbas had canceled a joint press conference with Rice. The officials added that Abbas said the Palestinians "will not attend the conference at any cost." The Israeli and Palestinian negotiation team will meet again today or tomorrow to resume talks on the joint declaration.

Rice reportedly told the Palestinians that Israel was prepared to commit to what the Palestinians called "a vague mention" of the issue of permanent borders. Israel is not prepared to commit to the 1967 borders, the Palestinian sources reported.

Wrapping up four days of shuttle diplomacy, Rice said yesterday that while the sides are only beginning the process of negotiations, she is optimistic about success.

"We are showing the parties that there is a basis for moving forward," she said. "It is a stop in a process aimed at achieving a Palestinian state living in peace alongside Israel." Rice also said that the current talks are the most serious the two sides have had about core issues in some time.

U.S. President George W. Bush said yesterday that it was important for Rice to help Israelis and Palestinians make progress leading into the upcoming conference.

"We believe that now is the time to push ahead with a meeting at which the Israelis and Palestinians will lay out a vision of what a state could look like," Bush said at a White House news conference.

"And the reason why there needs to be a vision of what a state could look like is because the Palestinians that have been made promises all these years need to see there's a serious, focused effort to step up a state," he said.