Israeli and Palestinian negotiators made progress on Monday toward completing a joint statement for the planned Middle East peace conference in Annapolis, Md., and President Bush appeared ready to paper over remaining differences between the two sides with his planned speech on Tuesday.

Palestinian negotiators expressed optimism that they would come away from the conference with enough substance — including a timetable for a year of renewed, intense negotiations — to give the Palestinian president, Mahmoud Abbas, the political cover he needs to satisfy battle-weary Palestinians back home.

The two sides were still wrangling late Monday over specifics of the timetable, with the Palestinians pressing for negotiations to be completed within the next eight months, a demand the Israelis have rejected. But Bush administration officials said that one way or the other, either in the joint statement or in Mr. Bush’s speech, a time frame would be set with the end of Mr. Bush’s term in office as the deadline for a final peace deal.

“I’m optimistic,” Mr. Bush said after meeting with the Israeli prime minister, Ehud Olmert, at the White House on Monday.

Speaking later at a State Department dinner for participants, Mr. Bush said that achieving the goal of a Palestinian-Israeli peace “requires difficult compromises, and the Israelis and Palestinians have elected leaders committed to making them.”

Mr. Olmert said that international support for the conference “is very important to us.”

“This time, it’s different because we are going to have a lot of participation in what I hope will launch a serious process of negotiations between us and the Palestinians,” Mr. Olmert said.

Bush administration officials are expected to announce Tuesday that the negotiations will begin immediately after the one-day Annapolis conference, at a White House meeting on Wednesday at which Mr. Olmert, Mr. Bush and Mr. Abbas are already scheduled to hold talks.

Officials from about 49 countries and international organizations — including Senegal, Greece and Brazil — are attending the conference, Mr. Bush’s first real effort at Middle East peacemaking since he took office. But the reality is that only five players matter in Annapolis: the Israelis, the Palestinians, the Americans, the Saudis and the Syrians.

Prince Saud al-Faisal, the Saudi foreign minister, said he had agreed to come because the United States had promised that the conference would lead to talks on the final status issues that have bedeviled peace negotiations since 1979: the status of Jerusalem, the fate of Palestinian refugees who left or were forced to leave their homes, the issue of Israeli settlements in the West Bank, and the borders of a final Palestinian state.

But Prince Saud signaled just how tough the refugee issue, in particular, would be. During a briefing with reporters shortly after he arrived in Washington on Monday, Prince Saud spoke at length — and critically — about the Israeli insistence that Palestinian refugees not be allowed the right of return to Israel.

“I mean, here’s an issue where people not from Palestine come to Palestine, occupied land in Palestine that happened to have people living there, and now they want to consider these people illegal in a purely Jewish homeland. Why?” Prince Saud said. “If you come to a neighborhood by your choice, you have to live with the people in the neighborhood.”

The issue of the right of return is expected to be the most intractable one, negotiators from all sides say. But the other final status issues are not exactly easy ones, either, which is why the Annapolis conference is not expected to settle any of them.

Instead, Palestinian officials and, to a lesser extent, the Bush administration, hope they can get from Israel at least a pledge to tackle those issues on a specific timetable in the next year.

“Our hope is high that we will come out of this conference in order to begin negotiations on the final status issues, in order to reach a peace agreement between the Palestinians and the Israelis so that security and peace can prevail,” Mr. Abbas, the Palestinian leader, said at the White House on Monday.

Israeli officials worked hard to play down expectations that the peace talks would yield much. They emphasize that negotiations after the session will be bilateral, with the United States only the interpreter of progress, and not an actual player.

Mr. Olmert met with Congressional leaders, including Senator Chuck Hagel, a Nebraska Republican; Senator Joseph I. Lieberman, a Connecticut independent; and Representatives Tom Lantos of California and Gary L. Ackerman of New York, both Democrats, for more than an hour on Monday after his meeting with Mr. Bush.

Mr. Ackerman said Mr. Olmert told the group that he and Mr. Bush had had a good meeting, and that Mr. Bush knew where Israel’s nonnegotiable lines are and agreed with him. Mr. Ackerman also said that Mr. Bush had promised the Israeli leader to emphasize in his speech that he cared about Israeli security.

Mr. Olmert said the Palestinians would have to rein in terrorism before Israel would make major moves to dismantle settlements, a step the Israeli leader said he was prepared to take.

Mr. Ackerman said Mr. Olmert also told the group that he would talk to the Arab states forcefully, that he was thrilled that they were at the conference and that if they wanted to help the process, they should step up to the plate and start the process of recognizing Israel.

That desire may take time to come to fruition. Prince Saud said he had no intention of shaking Mr. Olmert’s hand, and that Saudi recognition of Israel would come only after peace had been achieved between Israelis and Palestinians. “We are not here for theater,” he said. “We are interested in peace, not civility.”