Mideast peace deal unlikely this year: White House

WASHINGTON (Reuters) - The White House acknowledged for the first time on Thursday what analysts have been saying for months -- that Israel and the Palestinians were unlikely to reach a peace deal by year-end.

The admission came despite President George W. Bush's stated goal of an agreement before he leaves office.

The administration set the target date at a U.S.-sponsored peace conference in Annapolis, Maryland, last year but it drew heavy skepticism then, not least because Bush had long avoided direct engagement in Middle East peacemaking, and has since been all but discredited amid Israeli internal political turmoil.

Earlier on Thursday, U.S. Secretary of State Condoleezza Rice held out little hope that Israel and the Palestinians could reach a deal this year as she began a four-day visit to the Middle East.

Rice said Israel's decision to hold a parliamentary election, scheduled for February 10, would make it "very difficult" to secure a peace deal by the end of the year.

But she stopped short of formally declaring the process -- aimed at ending decades of conflict and creating a Palestinian state -- as dead for 2008.

In Washington, White House spokeswoman Dana Perino also cast strong doubt on the prospect for an agreement. Bush leaves office on January 20 when Democrat Barack Obama will be sworn in.

"We realize that with the political changes that have happened in Israel over the past couple of months and, really, since early summer ... that the prospect of being able to get one done became more unlikely," Perino told reporters.

But she added that, "It's important that we maintain momentum for the negotiations. It's our experience that over the past year, we have laid some very good groundwork."

"But no, we do not think that it's likely that it would happen before the end of the year," she said, referring to the prospect for reaching a deal.

Palestinian and Israeli leaders have said in recent weeks that a breakthrough was out of reach this year.

In Israel, Rice planned to meet Prime Minister Ehud Olmert, who has announced plans to resign because of a corruption scandal, as well as the three people who hope to succeed him.

They are Israeli Foreign Minister Tzipi Livni, head of Olmert's centrist Kadima party; conservative former Prime Minister Benjamin Netanyahu, a vocal critic of the peace process; and Defense Minister Ehud Barak of the Labor party, another former prime minister who trails the other two in opinion polls.

Even before the Israeli political crisis complicated matters, there had been little progress in renewed peace talks amid continued Israeli settlement building and violent flareups in and around the Gaza Strip.

(Editing by Alan Elsner)