The battle over the agenda of a conference on Palestinian statehood offers U.S. Secretary of State Condoleezza Rice a glimpse of the gruelling process that awaits if and when the two sides enter formal negotiations.

The odds of ultimate success are slim at best unless the Bush administration, which once derided what it called former U.S. President Bill Clinton's "shoot the moon" diplomacy, can bring weakened Israeli and Palestinian leaders to take risks their predecessors would not accept, former negotiators said.

Four days of shuttle diplomacy by Rice this week were not enough to close the gaps between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas over a joint document that they intend to present at the U.S.-sponsored conference in Annapolis, Maryland in November or December.

Even if a document for the conference is agreed, Rice's next challenge -- getting Olmert and Abbas to enter formal statehood talks and to try to reach agreement before President George W. Bush leaves office -- may prove an impossible balancing act.

Many of the concessions Olmert would have to make to reach a deal with Abbas -- from dividing Jerusalem and its holy sites to pulling Jewish settlers out of the occupied West Bank -- could bring down his coalition government, ushering in new elections that could paralyse peace moves for the rest of Bush's term.

The outlook for Abbas, who lost control of the Gaza Strip in June to Hamas Islamists who had won parliamentary elections in 2006, could be equally stark if the talks stall.

"It will bury Abbas, boost Hamas and really undermine American credibility, which is already low," said Aaron David Miller, who served as an adviser to six U.S. secretaries of state on Arab-Israeli negotiations.

The consensus among former Israeli, Palestinian and U.S. negotiators was that the starting point for renewed talks should be where Clinton left off.

HIGH STAKES

Some of Bush's aides have been critical of Clinton's efforts to broker an Israeli-Palestinian peace deal before leaving office. In early 2002, then-White House spokesman Ari Fleischer suggested Clinton's attempt to "shoot the moon" had created unrealistic expectations that boiled over into strife.

Palestinian and Israeli officials say another failure could spark violence. Fleischer this week cited "rising nervousness" about Annapolis and the possibility that "undue pressure" will be put on Israel, but said Bush knew the risks and the limits.

Rice said the current negotiators needed to work themselves through the issues, which include borders, status of Jerusalem, Palestinian refugees and Jewish settlements. "It would be a mistake to lock into and say, well, we're starting from a particular point of view that was established at some other point in time," Rice said when asked about Clinton's proposals.

Asked whether Clinton's proposals were a starting point for renewed talks, Olmert's spokeswoman Miri Eisin said the prime minister "doesn't intent to reinvent the wheel. He is aware of past efforts. We learn from them.

We're not bound to them." The ideas floated by Clinton in December 2000 would have produced a Palestinian state in roughly 97 percent of the West Bank and 100 percent of Gaza.

"That remains the closest outline of a peace agreement that the parties can agree to," said Shlomo Ben-Ami, who was Israel's left-leaning Labour foreign minister when the last talks on the "final status" of a peace deal collapsed.

Olmert has signalled a willingness to consider handing over "90-something" percent of the West Bank, but it is unclear whether he is willing to go as far as Clinton's proposal.

A senior Israeli official close to the current negotiations said it was important to look at the motivations on all sides, saying: "These are negotiations between Abbas and Olmert about trying to bolster themselves and weaken their enemies."

Olmert is trying to fend off political rivals after last year's war in Lebanon. Abbas wants to overcome Hamas. Bush and Rice want to burnish their legacies after the Iraq war and shore up Arab support against Iran.

Miller said distinctions must be made between reaching some sort of agreement and implementing it. "In these circumstances, implementation is almost impossible," he said, alluding to the Palestinian split between Hamas and Fatah.

Palestinian negotiator Saeb Erekat said it was up to Olmert to prepare the Israeli public. "Israel has to withdraw. Mr. Olmert should address the Israelis and tell them what they need to hear and not what they would like to hear," he said.

Miller played down the chances of that. "If you were an Israeli prime minister, would you make concessions that cut to the core of your identity and physical security for a partner who does not control all the guns?" he said of Abbas. "I don't understand how any Israeli prime minister can sell that." (Additional reporting by Arshad Mohammed)