U.S. special envoy to the Middle East George Mitchell was making his way back to Washington on Sunday after three days of meetings with Palestinian and Israeli leaders.

The veteran American diplomat is expected back in the region next week as part of a serious American push to reboot the stalled Israeli-Palestinian peace process.

Meeting Mitchell on Friday, Israeli Prime Minister Benjamin Netanyahu said Israel's face was turned towards peace.

"I look forward to working with you and with President Obama to advance peace. We're serious about it. We hope the Palestinians respond -- we have to move this process forward," Netanyahu said at the start of the first of two meetings with Mitchell over the weekend.

When Mitchell met Palestinian President Mahmoud Abbas on Friday, the American carried an invitation from U.S. President Barack Obama for Abbas to visit Washington.

"The exact date is not yet set up but it will be in May," Saeb Erekat, the chief Palestinian negotiator, told Xinhua on Sunday.

Although the United States is exerting itself in pushing forward the Israeli-Palestinian process, local analysts are still not optimistic about the prospect.

JERUSALEM REMAINS CENTER STAGE

Obama recently asked Netanyahu to answer around a dozen pointed questions that would allow Washington to understand Israel's positions regarding the peace process.

While the answers have not been made public, leaks to the media suggest that on one key area Netanyahu replied in a way that American diplomats would term "unhelpful to advancing the process. "

Sources with Israeli Prime Minister's Office told Xinhua on condition of anonymity on Thursday that Netanyahu has told Obama that Israel will not cease construction work in East Jerusalem, which the Palestinians view as the capital of their future state.

There has been a suggestion in the Israeli media over the weekend that the Americans would accept a position whereby officially Israel does not change its stance but that in practice all building work ceases.

"Mahmoud Abbas has insisted that before even proximity talks can take place, the United States must deliver a freeze on construction in Jerusalem, and Netanyahu is just as adamant in refusing to play that extremely sensitive card," said Gerald Steinberg, a professor of political science and Bar-Ilan University, just outside Tel Aviv.

"So in many ways we are stuck trying to find a way out of the dilemma that the Obama administration in its lack of experience created in its first year," Steinberg added.

Jerusalem, arguably the thorniest of issues that separate the Palestinian and Israeli positions, will not leave the headlines.

Despite an attempt by Netanyahu to block a right-wing Israeli march in East Jerusalem on Sunday, the protest went ahead, after the country's attorney general argued it was the people's democratic right to demonstrate.

The objections to the march from Arab residents of Silwan, which lies outside Jerusalem's Old City, were added to from a surprising source. Right-wing Jews who have bought homes in the village also said they thought the protest should not take place because Arabs would see it as a provocative act.

Indeed, in the hour before the march began, clashes erupted between masked Palestinians and Israeli security personnel.

A TEMPORARY STATE

Such occurrences are bad news for the Netanyahu government, which is already under considerable pressure from the international community to move closer to the Palestinian position.

It is perhaps with this in mind that Israel has reportedly proposed the creation of a Palestinian state inside temporary borders.

That idea was flatly rejected by Abbas on Saturday when he addressed members of his Fatah party's Revolutionary Council.

However, Palestinian and Israeli analysts see some benefit in the notion.

"At least that way people will become used to the idea of a state. It is better than nothing; one step in the right direction, " said Mohammed Dajani, a professor of political science and founder of the Islamic Organization of Wasatia Palestine.

Steinberg also sees merit in the creation of a temporary state. Not necessarily because it is a good idea in itself, but rather it helps to ease over some of the key difficulties.

The key permanent-status issues -- Jerusalem, the fate of the Palestinian refugees and security -- are deemed to be far too complicated to resolve at this moment in time.

"There's a real concern that if those were put on the table it would increase conflict and not lead to agreement. So a temporary state will round off some of those edges for a while and allow the process to go forward," Steinberg said on Sunday.

NEXT STEPS

While Mitchell returns to Washington, his colleague, Deputy Assistant Secretary of State for Near Eastern Affairs David Hale, is said to be staying on in the Middle East to try to cajole the parties back to the negotiating table after a hiatus of 18 months. Mitchell would like to see considerable progress in that direction by the time he returns to the region next week.

Meanwhile, Israeli Defense Minister Ehud Barak is slated to conduct high-level meetings in Washington this week, in part aimed at pushing forward the peace process.

Should the current diplomatic activity fail, Obama may be forced to unveil a fresh peace initiative. U.S. media reported that he has been creating a new plan in the event of the collapse of the thus far stillborn indirect talks.

Obama has been consulting in recent weeks with Arab leaders, with the speculation that a new plan is around the corner.

However, there were similar talks in September and October and no new proposal was made public. This seeming uncertainty from the White House coupled with media conjecture is leaving a very confused picture about what is really happening on the ground.

As Steinberg puts it, "Nobody knows. I don't see anything that' s changed in the last couple of months, where proximity talks were also rumored to be on the edge of beginning and did not happen."