Some signs of 'progress' at peace talks in Jerusalem

JERUSALEM - Amid a sharp increase in militant attacks from the Gaza Strip, Israelis and Palestinians concluded their latest round of peace talks late Wednesday without announcing a hoped-for breakthrough in an impasse over Jewish settlement construction.

U.S. Mideast envoy George Mitchell offered a glimmer of hope, saying "progress" had been made on the settlement issue, though he gave no details. Israeli and Palestinian officials declined to comment.

Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas met with U.S. Secretary of State Hillary Rodham Clinton at the prime minister's residence in Jerusalem, where a Palestinian flag flew, but key challenges remain over Palestinian threats to quit the talks unless Israel promises to halt all housing construction in the West Bank.

Throughout the day, Clinton also held a series of meetings with other leaders, including Israeli President Shimon Peres, Palestinian Authority Prime Minister Salam Fayyad, Israeli Defense Minister Ehud Barak and Israeli Foreign Minister Avigdor Lieberman.

Next week at the U.N.

But Clinton, in her first trip to the Mideast to press negotiations as secretary of state, appeared unable to bridge the differences. Contacts will resume at next week's U.N. General Assembly meetings in New York, where President Obama is expected to meet personally with the leaders. U.S. officials said Obama's personal intervention might be needed to break the deadlock.

U.S. officials said both sides are making headway on broader core issues, including setting up a framework to tackle items such as borders and security. U.S. mediators hope that by moving the talks along quickly, they can create a sense of momentum that will make it difficult for the leaders to break off the talks over the issue of the settlement building freeze.

Despite his claim of progress, Mitchell ducked a question on whether he believed that Palestinians would follow through on their threat to quit the talks over the settlement issue. Palestinian officials showed no signs of softening their position. "There is no chance to compromise on the issue of settlements," said Yasser Abed Rabbo, an adviser to Abbas, on Voice of Palestine radio, when asked whether Palestinians would agree to a U.S.-brokered compromise on the issue. "Settlements are illegal."

Netanyahu has announced no formal decisions about what he will do when a 10-month partial construction moratorium expires on Sept. 26, but he has hinted that he is open to a compromise.

'This is the time, and these are the leaders'

U.S. officials continued to strike an upbeat tone.

"This is the time, and these are the leaders," Clinton said between her meetings Wednesday.