The joint statement of understanding issued at the Israeli-Palestinian summit last week in Annapolis details an ambitious agenda: a pledge by Israeli and Palestinian leaders to endeavor to achieve peace by the end of 2008. The process seeks to resolve all outstanding issues in little more than a year, even those issues that have plagued peace efforts for decades: refugees, borders, Jerusalem.

It is perhaps symbolic that this agreement comes 60 years almost to the day after the United Nations authorized the partition plan to create a Jewish state and an Arab state in British-ruled Palestine. The Jews accepted the plan, while the Arabs rejected it. These many years later, the answer to the conflict is still a two-state solution. Had the Arabs accepted the original partition, Israelis and Palestinians could be celebrating 60 years of peaceful relations instead of so many years of war and suffering.

This time both parties, and the Arab world in general, seem to fully endorse the principle of two states for two peoples. Just as Israel must be recognized and accepted as the homeland of the Jewish people, so Palestine will be established as the homeland and the embodiment of the national aspirations of the Palestinian people.

As with past peace initiatives, the devil is in the details and the challenges are daunting. Israelis will have to be convinced that compromises over these painful issues will lead to genuine peace, free of terrorism and violence, and that giving up land ceded to a Palestinian state will not serve as a springboard for even more bloodshed, as occurred when Israel withdrew from Gaza in 2005 only to see that territory used as a launching pad for Kassam rockets.

President Mahmoud Abbas' statement to Prime Minister Ehud Olmert that he wants to "continue working closely with you until we are able to complete this historic, long-awaited mission together," is a positive overture. The challenge for the Palestinian leadership is to eschew violence and terror, establish law and order and develop political institutions. Without serious state-building, the Palestinian Authority (PA) will not be able to deliver any meaningful peace -- especially considering the rise of Hamas, its violent takeover of Gaza, and its rejection of the very concept of Israel's right to exist. The world does not need another terrorist state.

Israel, for its part, has made its intentions to pursue peace clear. Before the summit, Israel initiated confidence-building measures to assist Abbas in creating a better environment for progress. Beyond undertaking to freeze all settlement activity and to remove illegal outposts, Israel released almost 800 Palestinian inmates involved in terrorism, removed 25 roadblocks and checkpoints in the West Bank, transferred to the PA nearly $250 million in tax and customs revenues and joined with international partners to promote Palestinian infrastructure development projects.

In his speech at the Annapolis summit, Olmert reiterated Israel's willingness to make painful compromises for peace and went further to state that this peace process will significantly change the reality that emerged after the 1967 war. Additionally, his speech marked the first time Israel formally committed to help solve the Palestinian refugee issue.

The participation at the summit of 50 countries, including Arab and Islamic nations, is a significant endorsement of this peace process. Annapolis must be followed by an international effort to provide a supportive environment to help reach agreement. The international community has an important role to play by enhancing the functioning of the PA and improving economic conditions for the Palestinians at large. This is crucial in order to win the support of the population, which needs to see some of the fruits of peacemaking even while negotiations are taking place.

May the next 60 years be characterized by peace and prosperity for Palestinians and Israelis alike.

Steve Hunegs is executive director of the Jewish Community Relations Council of Minnesota and the Dakotas.