Israel and Palestinians commit to 2008 peace treaty

By Adam Entous and Sue Pleming

ANNAPOLIS, Maryland (Reuters) - With handshakes, leaders of the United States, Israel and the Palestinians agreed on Tuesday to launch immediate talks to secure a peace treaty by the end of 2008 that would create a Palestinian state.

President George W. Bush announced the deal at the opening of a 44-nation Middle East peace conference, with Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas standing at his side.

"We're off to a strong start," Bush told delegates to the day-long conference, which included 14 Arab states -- among them Syria and Saudi Arabia -- as well as major powers Russia, China, Britain, France and Germany.

The U.S.-backed peace effort is the most intense in the seven years since the collapse of negotiations and the outbreak of Middle East violence in the twilight of Bill Clinton's presidency.

The sides must overcome deep skepticism everywhere. A treaty has eluded past U.S. leaders despite decades of trying.

Political weakness at home could hamper the leaders' ability to maneuver. Unpopular wars in Iraq and Lebanon have hurt the standing of Bush and Olmert. Abbas in June lost control of the Gaza Strip to Hamas Islamists.

In need of a boost to his legacy before leaving office in January 2009, Bush arranged for a handshake between the two leaders next to the podium where he announced the agreement to start talks immediately.

All smiles, the three leaders drew rounds of applause as they spoke to representatives gathered around a U-shaped table in a majestic hall at the U.S. Naval Academy in Annapolis, Maryland, 32 miles from Washington, D.C.

The accord emerged from lengthy, last-minute talks on a joint document meant to chart the course for negotiating the toughest "final status" issues of the conflict -- Jerusalem, borders, security and the fate of Palestinian refugees.

Bush said Israel and the Palestinians would try to reach an agreement on a treaty and statehood by the end of 2008. Their representatives would hold a first session in the Middle East on December 12 and Abbas and Olmert would meet every other week.

"We agreed to immediately launch good faith, bilateral negotiations in order to conclude a peace treaty resolving all outstanding issues, including core issues, without exception," Bush said, reading from a joint statement.

"The time is right, the cause is just, and with hard effort, I know they can succeed," Bush said.

CHALLENGES AHEAD

Underscoring the challenges ahead, a senior official of Hamas declared Annapolis a "waste of time."

In the West Bank city of Hebron -- where Palestinians protested against the peace conference -- a demonstrator was killed when clashes broke out between security forces loyal to Abbas and Islamists who brand him a traitor.