Rice: Political Uncertainty in Israel A Drag on Mideast Peace
But she also said upon arriving here that "it is important to maintain momentum and support for the negotiations."
En route to the Middle East for her eighth trip to Israel and the Palestinian territories since the parties set the timeline for reaching an agreement at last November's summit at Annapolis, Md., Rice told reporters in her traveling party that political uncertainty in Israel was the main complication.
"It is our expectation that the Annapolis process has laid groundwork which should make possible the establishment of a Palestinian state when the political circumstances permit," Rice said. "I think that whatever happens by the end of the year, you've got a firm foundation for quickly moving this forward to conclusion."
Although Rice refused to absolutely rule out the chance of an agreement by year's end, her remarks reflect the first time that an official of the Bush administration has publicly not held out hope that the deadline could be met.
"We'll see where they are at the end of the year," said Rice, vowing to "work on this with the parties until the day that we leave."
With her time in office rapidly waning, Rice is hoping to shore up the fragile Israeli-Palestinian negotiations and leave a viable process for the incoming Obama administration.
She will also visit Egypt and Jordan to shore up Arab support for the talks. At some point before Obama moves into the White House on Jan. 20, Rice said she would like to see the sides memorialize the progress they have made to date but not stretch to conclude a partial deal.
"It will be important to wrap up all of that work one way or another," she said.
Rice has been making the same twin challenges to Israel and the Palestinians on more than 20 largely fruitless journeys to the region during her tenure as secretary of state: Israel should loosen its grip on the West Bank and the Palestinians should tighten theirs on militants.
The talks that began in Annapolis, Md., have produced few tangible results and are expected to be placed on hold for at least several months during the U.S. transition from Bush to Obama. In addition, Israel will hold elections on Feb. 10 and there are questions about the tenure of Palestinian President Mahmoud Abbas, whose term technically expires in January.
Rice will see Abbas and outgoing Israeli Prime Minister Ehud Olmert along with the chief negotiators from both sides before visiting Jenin, the West Bank town where Palestinians retook security control early this year.
She then heads to the Red Sea resort of Sharm el-Sheik in Egypt where top officials from the international diplomatic "quartet" on the Middle East will be briefed on the status of the talks on Sunday.
Any results officially reported to the quartet -- the European Union, Russia, the United States and the United Nations -- from Palestinian-Israeli talks so far could become a basis for future negotiations, even after the Israeli election.
The quartet envoys will get from Israeli and Palestinian negotiators a progress report that could prevent backpedaling during the Israeli and U.S. leadership changes.
The idea is to "listen and to record and to know where we are heading," EU envoy Marc Otte said after meeting with the chief Palestinian negotiator in Jerusalem on Thursday.
Israel and the Palestinians have agreed on key principles, such as a land swap, but gaps remain wide on core issues, including the partition of Jerusalem and the fate of Palestinian refugees.
Associated Press writer Karin Laub in Jerusalem contributed to this report.