U.S. Secretary of State Condoleezza Rice said Thursday an upcoming U.S.-sponsored Mideast conference must be substantive, and that the two sides must draft a document before the meeting that lays foundations for serious negotiations.

"The conference has to be substantive and advance the cause of a Palestinian state," Rice told a joint news conference with Palestinian Authority Chairman Mahmoud Abbas.

"Participants must not simply meet for the sake of meeting," she said.

Abbas and Olmert are working to put together a document before the conference that lays out objectives for further talks. However, this has been made difficult by the fact that Israel and the PA appear to have very different expectations of what they would like the conference to yield.

Olmert, who will meet Rice on Thursday, has cautioned against expecting more than a declaration of principles for establishing a Palestinian state.

Abbas has made clear he wants a deal that goes beyond previous agreements on the broad outlines of how the 60-year-old conflict can be resolved and sets a framework for resolving core disputes on borders, security and the status of Jerusalem and of Palestinian refugees from territory that is now Israel.

The meeting is expected to take place in November in Washington.

"What kind of document comes out of these discussions is something they will have to work out," said Rice, adding that she hoped it would lead to "serious negotiations for the establishment of a Palestinian state as soon as possible".

At a joint news conference with the visiting U.S. secretary of state, Abbas also said he will meet with U.S. President George W. Bush during next week's United Nations General Assembly in New York.

The two leaders last met at last year's General Assembly.

"We will have the opportunity to meet with President George Bush in coming days in New York, during the annual meeting of the UN General Assembly, to continue the discussions about searching for a just and comprehensive peace in the Middle East," Abbas said.

"We believe the time is right for the establishment of an independent Palestinian state, with East Jerusalem as its capital, and for living side by side in peace and security with the state of Israel," Abbas said.

Rice has found growing interest in "intensifying the dialogue", a senior aide said after she held talks with Olmert in Jerusalem on Wednesday.

Abbas said he informed Rice of the composition of the Palestinian negotiating team with Israel. Abbas and Olmert have held periodic talks in recent months, and agreed to set up negotiating teams that would try to reach the general outline of a peace deal ahead of the conference.

Abbas did not announce the names of the negotiating team, but his aides said it will be headed by former PA prime minister Ahmed Qureia, who led interim peace talks with Israel in the 1990s.

Qureia, 70, commonly referred to my his nickname Abu Alaa, is a former speaker of the Palestinian parliament and top official in Abbas' Fatah movement.

The Palestinian team is to meet with Israeli counterparts, in an attempt to forge the general outline of a peace agreement ahead a U.S.-hosted Mideast conference in the fall.

Rice met President Shimon Peres in the President's Residence in Jerusalem on Thursday and Foreign Minister Tzipi Livni the day before. She traveled to the West Bank city of Ramallah on Thursday, where she said she saw "a spirit and a desire to move towards peace" among Israelis and Palestinians, but that there were "many obstacles to overcome".

When asked how Rice could reconcile seemingly contradictory Israeli and Palestinian views of what the conference might achieve, a senior U.S. State Department official told reporters, "It could range from zero to a full-blown agreement. They are not in a position yet to put a label on it."

"Labels are really not a very good way to capture what is going on," he said, adding: "This appears to be a serious discussion about fundamental issues."

Rice may hear concerns from Abbas and his prime minister, Salam Fayad, over Israel's decision on Wednesday to declare the Gaza Strip a "hostile territory" , as well as about the pace of Israeli moves to ease movement for people in the West Bank.

Fayad's government has already said it wants Washington to press Israel not to cut energy and other supplies to the 1.5 million people of Gaza, despite hostility between the leaders in the West Bank and the Hamas Islamists who seized power in the coastal enclave in June after routing forces loyal to Abbas.

Rice, who U.S. officials said was unaware of Israel's plan when she flew in, said Washington shared Israeli opposition to Hamas but expected humanitarian supplies to continue.

She also said the internal Palestinian conflict should not jeopardize plans to found a single state in both the West Bank and Gaza.

The conference forms a major part of U.S. President George W. Bush's strategy to promote stability in the Middle East before he leaves office in a little over a year, ending a presidency marked by the violence in Iraq since the U.S. invasion.

Bush has encouraged Arab states to attend but several have said they would do so only if they saw it producing agreement on fundamental issues for Palestinians. Also unclear is whether states regarded as hostile, notably Syria, should be invited.

Highlighting uncertainty surrounding the nature of the gathering, when asked whether Syria would be welcome Rice told a news conference simply: "We haven't invited anyone yet."