After five days of shuttle diplomacy, Condoleezza Rice, the US Secretary of State, returned home empty-handed yesterday, having failed to pin down participants, an agenda or a firm date for a planned Middle East peace conference.

At the end of a punishing round of talks with Israeli, Palestinian and Arab leaders, Dr Rice said that she was “encouraged” by her mission, but admitted that serious obstacles remained.

“The teams are serious, the people are serious, the issues are serious, and so I am not surprised that there are some tensions,” she said before a meeting in London yesterday with King Abdullah of Jordan.

“I am not surprised that there are some ups and downs. That’s the character of this kind of endeavour, but I was encouraged by what I heard,” she said. Stephen Hadley, the US National Security Adviser, will travel to the Middle East next week to take up where she left off. Dr Rice is then expected back in the region before the end of the month.

By then the Bush Administration hopes to be able to invite participants to a Middle East peace conference in Annapolis, Maryland, to be held by the end of next month or the beginning of December.

The initiative, regarded as the most serious attempt in seven years to tackle the core issues between Israelis and Palestinians, could pave the way for the creation of a Palestinian state.

“The Palestinians that have been made promises all these years need to see there is a serious, focused effort to set up a state,” President Bush said. “And that is important so that the people who want to reject extremism have something to be for.”

Before the parties can sit down to talk, Ehud Olmert, the Israeli Prime Minister, and Mahmoud Abbas, the Palestinian President, must agree on the wording of a joint declaration.

The two sides are deadlocked over how to address the issues of the future Israeli-Palestinian borders, the fate of millions of Palestinian refugees and the status of Jerusalem, which each side claims as its capital.

The Palestinians are demanding that the negotiating document address the issues in detail and have also called for a timetable. The Israelis favour outlining the issues “in broad brushstrokes” and resist what they fear could become a deadline.

Mr Abbas said that the Palestinians would not attend the peace conference unless it was clear beforehand that their demands would be addressed.

“We cannot go to the meeting at any cost,” he said, adding that he wanted “a clear document and deadline to reach a definitive result”.

While the Israelis will be reluctant to commit themselves to any significant concessions, they do not want to be blamed for undermining an initiative set up by their main ally. They also stand to gain by taking part in the conference, which is expected to be attended by several Arab states, including Egypt, Jordan, Saudi Arabia, some Gulf countries and possibly Syria.

Even if Dr Rice can mediate between the two parties, diplomats engaged in the process remain doubtful that any real breakthrough is possible while the key players in the Middle East peace process are so weak.

Mr Olmert is clinging to power in the face of growing opposition. Mr Bush is widely seen in the region as a lame-duck president, with only a year to go before elections in America. Mr Abbas may be President, but his Fatah faction has been weakened badly since its eviction this year by Hamas, the Islamic militant group.