As President Bush headed to the Middle East to check on their peace talks, Israeli and Palestinian leaders agreed Tuesday to launch them in earnest, six weeks late.

It was that long ago that Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas stood beside Bush at an international conference in Annapolis, Md., and announced the start of full-scale negotiations with the aim of creating a Palestinian state by the end of 2008.

But the promised effort, a priority on Bush's waning agenda and a focus of his eight-day visit to the region starting here today, has been stalled by a quarrel over newly planned Jewish housing construction since the two sides' negotiators first met Dec. 12.

The Palestinians, taken aback by revelations of such plans on land in East Jerusalem and the West Bank that they seek for their state, have refused for weeks to tackle a wide range of other issues.

Prodded by the Bush administration, Olmert responded last month by ordering Cabinet ministers to seek his approval before authorizing new construction in the West Bank, which Israel captured in the 1967 Middle East War. His order did not fully satisfy the Palestinians because it did not halt projects in progress and did not apply to East Jerusalem, which Israel annexed in 1967.

Abbas nonetheless agreed Tuesday, in a two-hour meeting at Olmert's residence here, to end the deadlock and start grappling with core issues of the decades-old conflict. Those include the borders of a Palestinian state, the status of Palestinian refugees who fled homes in Israel, and conflicting claims over Jerusalem -- issues the two sides last addressed seven years ago.

Israeli government spokesman Mark Regev said negotiating teams led by Israeli Foreign Minister Tzipi Livni and former Palestinian Authority Prime Minister Ahmed Korei could begin work on those issues as early as next week.

The teams will try to resolve immediate disputes, such as the one over Jewish settlements, on a separate track, Regev said, and Olmert and Abbas will meet every two weeks to review their work.

That's essentially what the two sides agreed to start doing right after leaving Annapolis. The time lost since is an indication that progress will be difficult without significant U.S. pressure.

"When an American president comes and tries to encourage the sides to overcome the obstacles and try to solve them . . . that always helps the Palestinians and helps us move forward with the process," Israeli Deputy Prime Minister Haim Ramon said last week.

Before leaving Washington late Tuesday, Bush said he would encourage Israelis and Palestinians to make "tough decisions on complex questions." He said he was "optimistic about the prospects."

But U.S. national security advisor Stephen Hadley said he did not expect any breakthroughs during Bush's meetings today with Israeli leaders here and Thursday with Palestinian leaders in the West Bank city of Ramallah.

"Just his going there is going to advance the prospects," Hadley told reporters last week. "We're not looking for headline announcements."

Israeli and Palestinian analysts question how much progress Bush can make without a deeper personal involvement in the negotiations, especially in light of Olmert's political weakness at home and Abbas' loss of control of the Gaza Strip last year to the militant Islamic movement Hamas.

The talks have already strained Olmert's ideologically diverse coalition government. Avigdor Lieberman last week threatened to take his right-wing party, Israel Our Home, out of the government, reducing the ruling bloc's majority in parliament, if Olmert moved to negotiate on borders, refugees or Jerusalem.

Lieberman said Tuesday that he would not leave the government during Bush's visit and would meet with Olmert before making a decision.

Because the sides have yet to tackle the core issues, Bush is more likely during his visit to be drawn into peripheral feuds over Jewish settlements and Palestinian militant activity, obstacles that sour the climate for talks.

Israeli officials said Olmert would brief Bush on his plans to curb government-authorized settlement activity and dismantle dozens of unauthorized outposts in the West Bank.

Palestinian officials say Abbas will press his case for a complete freeze on Jewish housing construction on Palestinian-claimed land and a halt of Israeli army raids such as the four-day operation last week in the West Bank city of Nablus.

The two leaders sparred inconclusively over those matters during Tuesday's meeting.

"Let's make 2008 the year to reach a treaty," Palestinian negotiator Saeb Erekat quoted Abbas as telling Olmert in the meeting. "But this cannot happen if you continue to build settlements, continue with military incursions and keep putting checkpoints on our roads."

Olmert replied that Palestinian police had to do a better job of controlling militants intent on attacking the Jewish state, Israeli officials said. The Israeli army said its raid uncovered a suspected missile factory in Nablus.

"This is really a matter of concern," Regev said. "Nobody can expect us to stand by in the face of very real threats. We cannot allow a security vacuum."