Rice, Livni, Qurei meet as Olmert says he'll quit

U.S. Secretary of State Condoleezza Rice speaks at a news conference at Government House in Auckland July 26, 2008.

WASHINGTON (Reuters) - Three-way talks on an Israeli-Palestinian peace deal began in Washington on Wednesday but Israeli Prime Minister Ehud Olmert's decision to resign raised new questions about how soon progress could be made.

U.S. Secretary of State Condoleezza Rice met with Israeli Foreign Minister Tzipi Livni, who is considered a possible successor to Olmert. Then Rice sat down with Livni and former Palestinian Prime Minster Ahmed Qurei for an extended discussion.

The talks were the latest in a series Rice has convened this year but, like the Israeli-Palestinian bilateral negotiations, have yet to produce tangible progress toward ending the six-decade conflict.

The State Department already had dampened expectations that the parley would produce quick progress even before the news came from Israel that Olmert would resign after his ruling Kadima party chooses a new leader in a September 17 internal election.

State Department spokesman Sean McCormack said he could not predict what impact Olmert's move would have on the peace process. But he said the Bush administration, which wants to have an Israeli-Palestinian peace accord by the end of this year, would keep trying.

"We're going to keep moving forward," McCormack told reporters, adding that the administration would work with all "responsible" Israeli leaders. Further, he said, there seemed to be a great deal of support for the peace process within Israel.

"The fact of the matter is, if you wait for the perfect moment to try to help bring the two parties together in a final agreement, you're going to be waiting forever," McCormack said.

Earlier Wednesday, before Olmert announced his decision, McCormack said Rice probably would go back to the Middle East for more talks before the autumn.

Livni is one of four Kadima ministers who has launched a campaign to replace Olmert, who has been dogged by corruption scandals. She is seen as the likeliest successor from within Olmert's party.

Another contender is Defense Minister Ehud Barak, who met with Rice and other U.S. officials earlier this week.

Beyond the intrinsic difficulty of resolving such controversial issues as the delineation of borders, the fate of Palestinian refugees and the status of Jerusalem, the Israeli-Palestinian peace effort is further hindered by the political divisions on both sides.

Olmert has long been under a cloud because of the corruption investigation, and the Palestinians are split between the Hamas-ruled Gaza Strip and the West Bank, where Palestinian President Mahmoud Abbas' Fatah party holds sway.

As a result, there is deep skepticism among Israelis, Palestinians and independent analysts that there is any chance of achieving U.S. President George W. Bush's goal of "resolving all outstanding issues" before he leaves office in January.

Olmert said on Monday a full agreement that includes Jerusalem was not within reach this year but it was possible that differences over borders and refugees could be bridged.

"No agreement without Jerusalem," Qurei flatly told reporters after he met Rice at the State Department on Tuesday. Asked about the chances of an agreement this year, Qurei looked up at the sky and said: "It's up to God."

(Additional reporting by Dan Williams and Arshad Mohammed; Editing by Bill Trott)