U.S. Secretary of State Condoleezza Rice on Friday denied the Israeli-Palestinian peace process sponsored by U.S. President George W. Bush was a failure, saying it should lay the ground for an eventual deal.

Launched nearly a year ago at a conference in Annapolis, Maryland, the negotiations were hampered from the start by violence and bitter disputes over Israel's settlement building and the future of Jerusalem.

"We knew ... that if that agreement was not reached by the end of the year, there would be those that would say that the Annapolis process, the negotiations, had failed. In fact, it is quite the opposite," Rice told a news conference in the West Bank city of Ramallah with Palestinian President Mahmoud Abbas.

"While we may not yet be at the finish line, I am quite certain that if Palestinians and Israelis stay on the Annapolis course, they are going to cross that finish line and can do so relatively soon," she added.

Israel, PA to continue talks on core issues with Obama's help

Israel and the Palestinian Authority are to announce on Sunday their commitment to continuing talks on the core issues in 2009 after president-elect Barack Obama takes office. The parties have agreed to negotiate based on the principles determined at the Annapolis conference.

Rice said Thursday during her visit to Israel that the United States would remain a true friend of Israel.

The statement on the continued negotiations is to be made to the members of the Quartet - the United States, Russia, the United Nations and the European Union - during a meeting at Sharm el-Sheikh.

Foreign Minister Tzipi Livni and her Palestinian counterpart, Ahmed Qureia, will brief the Quartet's foreign ministers on progress in talks over the past year since the Annapolis conference.

A statement at the end of Sunday's meeting is expected to outline the obligations of each party based on the principles of the Annapolis conference:

The obligation of the parties to the process and a two-state solution; bilateral negotiations only between Israel and the PA, which will be secret; commitment to the first stage of the Road Map - a cessation of settlement construction and evacuation of illegal outposts by Israel, and a war on terror by the Palestinians; Israel and the PA will continue working together to bolster Palestinian institutions, with an emphasis on security and judicial bodies; and the international community will continue to support and assist the process diplomatically and economically.

Rice, who arrived in Israel on Thursday, said at a press conference hosted by Livni that negotiations over the past year had been the most serious ever and ended seven years of intifada.

Livni, who read her remarks, reiterated the messages from her election campaign in which she differentiated between herself and Benjamin Netanyahu. "We are realistic enough to recognize the reality we face, but we are also determined enough to change it. I believe deeply that stagnation is not in Israel's interest and cannot be our policy," Livni said.

She added that the Israeli public did not need slogans, but solutions. Any such solution would require a response to Israel's needs, first and foremost security.

Rice and Linvi also discussed the Iranian issue and the administration's intention to open an American interests section in Tehran, which Livni said at the briefing that she opposed.

Obama, Olmert agree on need to advance Mideast peace talks

Outgoing Prime Minister Ehud Olmert called Obama on Thursday, and the two discussed the need to press ahead with the peace process with the Palestinians, Olmert's office said.

The current peace talks, launched nearly a year ago at a conference sponsored by U.S. President George W. Bush, have been bogged down from the start by violence, and bitter disputes over Jewish settlement building and the future of Jerusalem.

The White House said on Thursday that an agreement was unlikely to be reached between the sides before Bush leaves office in January.

In a statement, Olmert's office said the prime minister and Obama "agreed on the need to continue to advance the peace process, and this, while safeguarding the security of Israel".

The statement said Obama and Olmert also "spoke about the long friendship between the United States and Israel and the need to preserve and strengthen this friendship."

The statement provided no other details about the conversation, the first between the two leaders since Obama's victory in the U.S. presidential election on Tuesday.