U.S. Secretary of State Condoleezza Rice said yesterday that she would leave "no stone unturned" in order to reach an Israeli-Palestinian peace deal before leaving office, but conceded that time is running out.

Speaking to a U.S. conference on Palestinian business and investment, Rice said she still hoped to reach the Bush administration's goal of a peace deal by the end of 2008, which was set at the Annapolis summit nearly a year ago.

"It is very difficult, there is a hard road ahead, but if we do not try, we certainly will not succeed," she said, adding she was sure negotiations would ultimately lead to a Palestinian state.

Rice has made multiple trips to the Middle East to broker a peace agreement. Nevertheless, U.S.-sponsored negotiations have made little progress, and Israeli and Palestinian officials have expressed doubt as to whether the year-end target is realistic.

An additional problem is the political upheaval in Israel. New Kadima leader Tzipi Livni is trying to form a new government, after Prime Minister Ehud Olmert resigned over a series of corruption scandals.

The gathering of U.S. business leaders at the Chamber of Commerce headquarters was a follow-up to a Bethlehem conference in May, where private investors pledged to pump $1.4 billion into Palestinian businesses to bolster the economy.

Palestinian Prime Minister Salam Fayyad said most investment had gone into the West Bank, "but we look forward to the day when we will be able to do this in Gaza, for Gaza is, and will always be, an integral part of our homeland."