US secretary of state Condoleezza Rice has said the time has come for the creation of a Palestinian state, and that Israelis and Palestinians are engaged in the "most serious" attempt in years to resolve the conflict.
Meanwhile, Israeli prime minister Ehud Olmert, in his most far-reaching statements on the matter to date, hinted yesterday he might be willing to forego large parts of east Jerusalem, which the Palestinians demand as the future capital of an independent state.
Standing next to Palestinian president Mahmoud Abbas in Ramallah yesterday, Dr Rice said: "Frankly, it's time for the establishment of a Palestinian state."
She has been trying to inject urgency into efforts to bring about a regional Middle East peace conference next month. However, she would not say when the US planned to begin sending out invitations to the summit.
"I wanted to say in my own voice, to be able to say to as many people as possible, that the United States sees the establishment of a Palestinian state and a two-state solution as absolutely essential for the future, not just of Palestinians and Israelis but also for the Middle East and indeed to American interests. That's really a message that I think only I can deliver," she said.
Dr Rice is in the region as part of an effort to iron out differences between the Israelis and Palestinians ahead of a US-sponsored regional summit that is scheduled for next month.
Mr Olmert has said he does not view the drafting of a joint declaration of principles on a future peace deal as a pre-condition for holding the talks, but Palestinian leaders have said if there is no document, they will not attend the summit.
Palestinian leaders want agreement on a document that outlines the solution to issues that are at the heart of the Middle East conflict, including the borders of a future Palestinian state, the fate of refugees and the status of Jerusalem.
Speaking yesterday in parliament, Mr Olmert questioned whether Arab neighbourhoods in east Jerusalem should remain under Israeli control, suggesting he may be willing to divide the disputed city. "Was it necessary to also add the Shuafat refugee camp, Sawakra, Walaje and other villages and define them as part of Jerusalem?" the prime minister asked, referring to several of the city's Arab areas.