Obstacles remained, and Mr Peres went back to Jerusalem for what he described as "urgent consultations".
"Some progress was done," he said after the meeting but added: "The picture is not completed." He and Mr Arafat were to meet again later. Asked if a deal could be wrapped up by last night, Mr Peres said: "We shall try." Across the border in Eilat, 10 committees of Israeli and Palestinian negotiators laboured over technical details of the deal.
If Mr Peres and Mr Arafat agree to a framework, the committees will still have to thrash out specifics.
The two sides took a big step on Tuesday by setting a timetable for Israel's withdrawal from occupied parts of the West Bank. But more than five hours of later talks failed to resolve problems including how to share water and electricity and guarantee security for settlers.
"The Palestinians want a deal that is good," said a PLO spokesman, Marwan Kanafani. "Elections but no water, this is not a good deal. Security but no water, this is not a good deal. We need a comprehensive deal, a fair deal."
He said an autonomy agreement could be reached last night "if the Israelis are sincere to the process".
Yesterday Israel unexpectedly said it would seal off the Gaza Strip today and tomorrow. It is feared that militant Palestinians could try to stage an attack to scuttle an emerging agreement.