Olmert and Abbas give themselves one year to solve it all

Israelis and Palestinians will embark next month on their first serious drive in seven years to reach a comprehensive peace settlement, with the ambitious goal of a deal by the end of 2008 to resolve issues that have defied agreement for six decades.

In a joint statement, in doubt until the moment President George Bush read it out at the start of the Middle East conference here, the two foes vowed to "bring an end to bloodshed, suffering and decades of conflict between our peoples" and to build a peace "based on freedom, security, justice, dignity, respect" between two independent states living side by side. The announcement made, Mr Bush then clasped hands with Ehud Olmert and Mahmoud Abbas, before the Israeli Prime Minister and the Palestinian President shook hands separately. "We are off to a strong start," the US President said.

But in their separate addresses to more than 50 delegations here in Annapolis, all three did not hide how huge a task lies ahead, in talks under the umbrella of a steering committee which will meet every fortnight, along with regular meetings between Mr Olmert and Mr Abbas themselves.

Annapolis was only a start, they stressed, and the real negotiations would take place elsewhere, between the protagonists. All the core issues would be dealt with, the Israeli Prime Minister declared, "and no subject would be avoided."

In the process, what he termed "the reality since 1967" on the ground would be significantly changed. "This will be an extremely difficult process, but it is nevertheless inevitable. I know this, many of my people know this, we are prepared for it," Mr Olmert said. Noting the presence of 12 Arab countries at the one-day meeting – including Saudi Arabia and Syria – he urged all of them to follow the example of Egypt and Jordan and establish diplomatic relations with the Jewish state. "They shouldn't 'watch the peace train go by' – it doesn't help you and it hurts us."

But, despite the ringing words and soaring aspirations, there was no sign of any budging on the so-called "final status" issues, on which they seem as far apart as ever. These include the future borders of the two states, the fate of Israeli settlements in the occupied territories, the right of return of Palestinian refugees since 1948, and the status of Jerusalem, claimed by both as their capital.

A measure of the problems was the immense difficulty in securing even the joint statement, on which Israeli and Palestinian negotiators wrestled almost until the curtain went up in the ornate Memorial Hall of the US Naval Academy. In his 20-minute address, Mr Abbas offered no sign of compromise. Instead, he said, "I have the right here to defend... the right of my people to a new dawn, with no occupation, no separation wall, no prisons with thousands of prisoners, no assassinations, no siege, and no roadblocks around villages and cities.

"Let us not negotiate out of fear, but let us not fear to negotiate," Mr Abbas said, consciously borrowing the words of President John Kennedy. Hardly had he finished speaking, however, than officials of the rival Palestinian organisation Hamas, which controls the Gaza Strip, rejected his call.

Much depends on how strongly the US is prepared to keep up pressure. Mr Bush pledged his full commitment until he leaves office in January 2009. "A battle for the future of the Middle East is under way," the President said, echoing his theme of a struggle between democracies and radical Islam, "and we must not cede victory to the extremists." Those words were also a reference to Iran. The US is gambling that a shared fear of Tehran will push Israel and moderate Arab states closer, thus increasing momentum behind the process.