In the first visit by an American secretary of state to the city of Jenin, a once-infamous hub of Palestinian militancy, Secretary of State Condoleezza Rice sought to strike a positive chord at the close of what will probably be her last official trip to Israel and the Palestinian territories.

Ms. Rice has acknowledged that the Israeli-Palestinian peace process is unlikely to achieve its goal of an agreement by the end of the year and has devoted this trip to other aspects of the process, chiefly the building of reliable Palestinian institutions in preparation for a state.

Also on Saturday, the militant group Hamas, which controls the Palestinian territory of Gaza, said it would boycott negotiations with the rival group Fatah, and Egypt canceled the talks, which were scheduled to begin Monday.

Ms. Rice spent three hours in the newly transformed city of Jenin on Saturday and inaugurated a hospital wing renovated with American funds.

During the visit, the State Department also announced a new round of American government assistance to Jenin totaling $14 million, much of it to be spent on road improvements and other infrastructure and educational projects in the area.

Until recently Jenin was a forbidden zone for foreign dignitaries. The scene of a bloody battle between Israeli forces and Palestinian gunmen in 2002, it came to represent the capital of terrorism for many Israelis, and, for many Palestinians, a symbol of resistance.

Today, though, Jenin is a showcase of success for the Palestinian Authority, following a law and order campaign this spring by specially trained Palestinian security forces, and an example of how a particularly thorny situation can be turned around.

With the peace process, which started at an American-sponsored conference in Annapolis, Md., last fall, now up in the air, Ms. Rice focused on the most tangible and visible evidence of progress, the reform of the Palestinian security apparatuses and their efforts here in Jenin.

Even under difficult circumstances and despite the city’s difficult past, Ms. Rice told reporters at a joint news conference here with the Palestinian prime minister, Salam Fayyad: “This is a place of hope. This is a place of inspiration.”

She said, “Ultimately, it is “a place from where the Palestinian state will spring up.”

Palestinians came out to gawk as the secretary’s motorcade sped into the city along a potholed road lined with members of several Palestinian security units in various uniforms.

About 600 Palestinian security personnel members were deployed in Jenin in May, some of whom were trained in Jordan under an American-sponsored program to back up the forces already there. Most have since been redeployed to other parts of the West Bank, including Hebron.

Lt. Gen. Keith W. Dayton, the United States security coordinator, told reporters that the exercise had been a “great success,” and that the Israelis said they had reduced their incursions into Jenin by about 40 percent.

Mr. Fayyad said the Palestinians would continue to build the institutions of statehood “despite the Israeli occupation.” But he warned that without a political agreement, the measures on the ground would be seen increasingly as “improving the quality of the occupation” and “beautifying it.”

Ms. Rice did not say whether this would be her last trip to the region as secretary of state, but the whole visit, which began Thursday, had an air of finality about it.

On Saturday evening she met with Egyptian officials and the Russian foreign minister, Sergey V. Lavrov, in Sharm el Sheik, Egypt. On Sunday, she is scheduled to meet with senior representatives of the quartet of Middle East peace mediators — the United States, the European Union, the United Nations and Russia.

The Bush administration is seeking to buttress international support for the Annapolis process to try to ensure that it will survive the political transition in the United States and a possible change of government in Israel, where elections are scheduled for Feb 10.

Tzipi Livni, the foreign minister and Israel’s chief negotiator with the Palestinians, will be contending for the premiership against Benjamin Netanyahu, the leader of the right-wing opposition.

After meeting with Ms. Rice in Jerusalem on Friday, Mr. Netanyahu told reporters that he intended to propose a “new path” for peace with the Palestinians combining some kind of political track with hastened economic development.

Also on Saturday, Egypt announced the cancellation of reconciliation talks between the rival Palestinian groups Fatah and Hamas, which were supposed to start under its auspices on Monday.

Hamas had said it was boycotting the talks because the Palestinian Authority, headed by President Mahmoud Abbas of Fatah, had refused to release the Islamic group’s political prisoners in the West Bank.

Both Mr. Abbas and Mr. Fayyad denied that the authority made any arrests based on political affiliations, saying it had detained people for only security or criminal offenses.