U.S. Secretary of State Condoleezza Rice says her talks with Israeli and Palestinian leaders have convinced her that both sides want the upcoming U.S.- sponsored Mideast peace conference to succeed. VOA's Jim Teeple reports Secretary Rice has traveled to the occupied West Bank for talks with Palestinian President Mahmoud Abbas, and other Palestinian leaders.

Condoleezza Rice and Mahmoud Abbas have held nearly a dozen meetings so far this year, but neither has expressed as much optimism as they did following their latest talks in the West Bank city of Ramallah.

Rice who held talks with Israeli leaders on Sunday, said Israelis and Palestinian negotiators appear to moving closer together, which could help the chances for success at the upcoming U.S.-sponsored Mideast peace summit, planned for Annapolis, Maryland later this month.

"Let me just say I am tremendously impressed by the seriousness of both parties," said Condoleezza Rice. "I was impressed last night with Prime Minister Olmert's very clear message that he sees Annapolis as a launching pad for negotiations on all outstanding issues, and I welcome very much President Abbas' positive reaction to what he heard last night."

Speaking at a Mideast policy forum dinner Sunday, Israeli Prime Minister Ehud Olmert said he believed real progress can be made toward the establishment of a Palestinian state in the remaining year of the Bush administration. Israeli news reports say Mr. Olmert is also considering releasing up to two-thousand Palestinian prisoners before the Annapolis meeting gets underway - something Palestinian leaders have appealed to him to do.

At their joint press conference in Ramallah, Mr. Abbas said he is encouraged.

The Palestinian president says encouraging steps from Americans and Israelis make him optimistic that despite difficult negotiations ahead, Palestinians will some day live independently, side-by-side with Israel.

Aides to Mr. Abbas say Palestinians have received assurances from U.S. diplomats that all of the so-called final status issues -Jerusalem, refugees and borders will be discussed in negotiations that could follow the Annapolis conference.

In his remarks Sunday, Mr. Olmert said Israel is willing to honor its commitment to the Roadmap peace plan which calls for Israel to stop building settlements in the West Bank, but that Palestinians also need to honor their commitment to the Roadmap, which requires Palestinians to stop their attacks against Israel.