George Mitchell, the US Middle East envoy, said yesterday that he hoped to make "real progress" in peace talks, even as media reports suggested that the Palestinians may be disappointed with Washington's efforts so far.

Mr Mitchell met in Cairo with Hosni Mubarak, the Egyptian president, on the third day of his visit to the region.

"In the days ahead our discussions with both sides will be substantive, two-way conversations with an eye towards making real progress in the next few months on the key questions of an eventual framework agreement," he said.

The US emissary appeared determined to salvage the battered Middle East peace efforts of Barack Obama, the US president. Last week, Washington's bid to re-ignite direct talks between Israel and the Palestinians collapsed after it failed to convince Israel to freeze Jewish settlement expansion in the occupied West Bank.

Face-to-face talks were resumed on September 2, but halted three weeks later after Israel rejected the Palestinian demand to institute another moratorium on settlement construction when the previous 10-month freeze expired on September 26.

Mr Mitchell said that Israelis and Palestinians had agreed in September "to pursue a framework agreement that would establish the fundamental compromises on all permanent status issues … to pave the way for a final peace treaty. That remains our goal."

Mr Mitchell's arrival in Egypt coincided with that of Mahmoud Abbas, the president of the western-backed Palestinian Authority. Mr Abbas, who met with Mr Mitchell at his headquarters in the West Bank city of Ramallah on Tuesday, held discussions with Mr Mubarak and late yesterday was due to consult with Arab League officials about the next steps in the peace process.

However, Mr Abbas's talks with Mr Mitchell did not appear to answer the Palestinian leader's demands. A report in the London-based Al Hayat newspaper yesterday said that the US envoy had declined to make any guarantees to the Palestinians regarding the indirect negotiations that Washington now plans to pursue.

The report said the ideas raised by Mr Mitchell did not call for an Israeli withdrawal from the entire Palestinian territory that the country captured in the 1967 Arab-Israeli war.

The newspaper added that Mr Mitchell had suggested that Egypt and Jordan - the only Arab countries that have peace pacts with Israel - be involved in the talks over the future Palestinian state's borders.

Palestinian officials said this week that Saeb Erekat, a Palestinian negotiator, met Hillary Clinton, the US secretary of state, in Washington last week and handed her a letter outlining the Palestinian conditions for resuming any sort of talks, whether direct or indirect.

The letter requested US guarantees such as an Israeli settlement freeze and the recognition of a Palestinian state within the territories that Israeli took over in 1967 - namely, the West Bank, East Jerusalem and the Gaza Strip. If the US declines on the latter demand, the Palestinians asked that it not hinder their effort to seek such recognition from the United Nations Security Council.

Israel, however, opposes the Palestinian conditions. Michael Oren, Israel's ambassador in Washington, told Bloomberg News in an interview yesterday that a Palestinian state would likely not be created along the pre-1967 borders.

While "two states for two people" is the Israeli government's goal, those states "wouldn't follow the borders of the pre-1967 situation, because those were not defensible borders," Mr Oren said. He added that Israel feared a "nightmare scenario" where the country was attacked from the east, and was particularly worried about the porous border between a future Palestinian state and Jordan.

Mr Oren said that Israel wanted a "continued Israeli army presence along that border. It could be phased. It could be reviewed every couple of years to see how things are going."

Palestinians, however, have rejected any Israeli military presence in their future state, although they said they would be open to international forces helping to secure the borders.

Israel's condition for its continued presence along the future Palestine's borders was one of the security guarantees requested of the US before any peace agreement was clinched, Mr Oren said

The US appears to be attentive to Israel's demands. Yesterday, Israel's mass-selling Yediot Ahronot newspaper said that Dennis Ross, Mr Obama's adviser on the Middle East, arrived in the country to hold two days of secret meetings with defence officials in order to understand Israel's security needs.