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Ms Rice criticised new settlement building in the West Bank
US Secretary of State Condoleezza Rice said there is a still a "good chance" of a peace deal after talks with the Israelis and Palestinians.
Ms Rice met separately with Palestinian leader Mahmoud Abbas and Israeli PM Ehud Olmert, and held three-way talks with both sides' negotiators.
The visit was her 17th to the region in the past two years, as she pushes for an agreement by the end of 2008.
She said talks were "intensive", amid heavy doubts a deal can be reached.
"God willing and with the goodwill of the parties and the tireless work of the parties we have a good chance to succeed," she said at a news conference alongside Mr Abbas.
"If this had been easy, somebody would have solved it a long time ago."
The target of a deal by the end of US President George Bush's term in January 2009 was set at a peace conference in Annapolis in November last year.
But correspondents say there is much scepticism over whether this will be achieved.
'Not helpful'
Mr Abbas said Israeli settlements in the West Bank were the main obstacle, but the process was still continuing:
"Just because we have not yet succeeded does not mean we have failed," he said.
I don't think settlement activity is helpful
Condoleezza Rice
US Secretary of State
W Bank building 'doubles'
The talks came as a report by the Israeli pressure group Peace Now said construction in West Bank settlements had nearly doubled in the first half of this year, in comparison to the same period in 2007.
Earlier, in a joint press conference with Israeli Foreign Minister Tzipi Livni, Ms Rice reiterated the US position that Israeli settlement activity is "not helpful".
Ms Livni said settlement work was limited to "small activities" which would not influence the negotiations or borders of a future Palestinian state.
Ms Rice also held three-way talks with Ms Livni, a favourite to succeed Mr Olmert, and the chief Palestinian negotiator, Ahmed Qurei.
Relations strained
The US Secretary of State has played down the possibility that details of an interim agreement might be published next month.
Relations between Israel and the Palestinians have been strained in recent months and both have internal issues.
The Israeli leadership is in flux: Prime Minister Ehud Olmert has said he will step down after new internal party elections.
And the Palestinians remain divided between those in charge of the West Bank, with whom the Israelis are talking, and the rival Islamist Hamas faction, in control of the Gaza Strip.
Ms Rice's visit has coincided with the release of 198 Palestinian prisoners in what Israel called a goodwill gesture to Palestinian leader Mahmoud Abbas.
Ms Rice welcomed news of the prisoner release as "a very good step"
US Secretary of State Condoleezza Rice said there is a still a "good chance" of a peace deal after talks with the Israelis and Palestinians.
Ms Rice met separately with Palestinian leader Mahmoud Abbas and Israeli PM Ehud Olmert, and held three-way talks with both sides' negotiators.
The visit was her 17th to the region in the past two years, as she pushes for an agreement by the end of 2008.
She said talks were "intensive", amid heavy doubts a deal can be reached.
"God willing and with the goodwill of the parties and the tireless work of the parties we have a good chance to succeed," she said at a news conference alongside Mr Abbas.
"If this had been easy, somebody would have solved it a long time ago."
The target of a deal by the end of US President George Bush's term in January 2009 was set at a peace conference in Annapolis in November last year.
But correspondents say there is much scepticism over whether this will be achieved.
'Not helpful'
Mr Abbas said Israeli settlements in the West Bank were the main obstacle, but the process was still continuing:
"Just because we have not yet succeeded does not mean we have failed," he said.
I don't think settlement activity is helpful
Condoleezza Rice
US Secretary of State
W Bank building 'doubles'
The talks came as a report by the Israeli pressure group Peace Now said construction in West Bank settlements had nearly doubled in the first half of this year, in comparison to the same period in 2007.
Earlier, in a joint press conference with Israeli Foreign Minister Tzipi Livni, Ms Rice reiterated the US position that Israeli settlement activity is "not helpful".
Ms Livni said settlement work was limited to "small activities" which would not influence the negotiations or borders of a future Palestinian state.
Ms Rice also held three-way talks with Ms Livni, a favourite to succeed Mr Olmert, and the chief Palestinian negotiator, Ahmed Qurei.
Relations strained
The US Secretary of State has played down the possibility that details of an interim agreement might be published next month.
Relations between Israel and the Palestinians have been strained in recent months and both have internal issues.
The Israeli leadership is in flux: Prime Minister Ehud Olmert has said he will step down after new internal party elections.
And the Palestinians remain divided between those in charge of the West Bank, with whom the Israelis are talking, and the rival Islamist Hamas faction, in control of the Gaza Strip.
Ms Rice's visit has coincided with the release of 198 Palestinian prisoners in what Israel called a goodwill gesture to Palestinian leader Mahmoud Abbas.
Ms Rice welcomed news of the prisoner release as "a very good step"
