Palestinian Authority President Mahmoud Abbas said Monday that he believes the path to peace with Israel is now clear and that a Palestinian state can be achieved before the end of the Bush administration in January 2009.

Echoing a statement made Sunday night by Israeli Prime Minister Ehud Olmert, Abbas said that an upcoming peace conference in Annapolis would mark the start of serious negotiations over core issues that have posed insurmountable obstacles for decades -- the status of Jerusalem, the borders of Israel and Palestine, the removal of Israeli settlements in the West Bank and the rights claimed by Palestinian refugees who left or were forced from their homes when the state of Israel was established.

Abbas praised Secretary of State Condoleezza Rice's efforts and her "insistence on . . . concluding peace within the presidential term of Mr. Bush." Her persistence, he said, had turned the Annapolis conference into "a serious occasion to launch a genuine peace process."

The statements by the Israeli and Palestinian leaders exceeded Rice's most optimistic expectations for a diplomatic effort that appeared to be faltering as recently as last week. The leaders' agreement to attend the conference and their professed optimism are likely to open the door for Arab states, including Saudi Arabia, to take part.

"It is a historic time, a time of real opportunity," said Rice, standing alongside Abbas at a news conference here. The negotiations, she said, "could achieve their goal within the time remaining within the Bush administration."

Others, while claiming genuine progress, were less certain of where it would lead. One senior State Department official, recalling decades of dashed hopes, cautioned that "you never say never in the Middle East. You've always got to be ready for bad news."

It was similarly unclear whether Olmert and Abbas, both of whom are politically weak, will be able to carry others along with them.