Following West Bank talks ahead of a meeting with Israeli Prime Minister Ehud Olmert in Jerusalem, Washington's top diplomat praised the moderate Palestinian leader for his efforts in bringing about a five-day truce in Gaza.

"Thank you also for the efforts you have made to bring about the ceasefire that is now in effect in Gaza and that we hope will be consolidated so that it can be extended because we would hope in time for a comprehensive ceasefire," Rice told a joint news conference with Abbas in Jericho.

Under the terms of the ceasefire, which came into effect on Sunday in the Gaza Strip, Palestinian armed groups agreed to halt rocket fire against the Jewish state in exchange for an Israeli troop withdrawal from the territory.

"We talked about the truce that has taken effect in the Gaza Strip and we hope it will be extended to the West Bank," the Palestinian leader said.

The truce, which has largely held, aims to halt five months of fighting between Israelis and Palestinian militants in the Gaza Strip which has left some 400 Palestinians and three Israeli soldiers dead in the territory.

Rice heaped praise on the moderate Abbas for what she called his "extraordinary efforts" in trying to create a Palestinian unity government with radical Islamists Hamas that Abbas declared had reached a "dead end".

She said they had discussed "how we can intensify our efforts to support our commitment towards progress on a two-state solution."

"The creation of a viable, independent, democratic Palestinian state that can live side-by-side in peace with Israel would be not just a remarkable achievement but a just achievement," Rice declared.

The Abbas-Rice talks came just hours after US President George W. Bush reiterated his support for solving the Israeli-Palestinian conflict and gave a ringing endorsement of Abbas, whom he said enjoyed the world's support.

"There is no question that if we were able to settle the Palestinian-Israeli issue it would help bring more peace to the Middle East and therefore our government is focused on helping develop a two-state solution," Bush told a news conference in Amman after crisis talks with the Iraqi prime minister.

"Abu Mazen (Abbas), who I believe wants there to be a Palestinian state living side by side with a peace in Israel, deserves the support of the world and he deserves support in peeling his government away from those who do not recognise Israel's right to exist," he said, alluding to radicals Hamas.

Washington has insisted the key to breaking Israeli-Palestinian stalemate lies with efforts by Abbas to sideline the Islamist group, which has controlled the Palestinian government since winning elections early this year.

The European Union, Israel and the United States have imposed a devastating aid boycott on the government because Hamas has refused international demands to renounce violence or recognise Israel's right to exist.

Abbas has been trying for months to negotiate a national unity government with the backing of Hamas, but he told the Jericho news conference that the talks had "unfortunately reached a dead end".

"This is very painful for us because we know how badly the people have been suffering over the last nine months," he said.

During her talks with Olmert, Rice is expected to ask him to elaborate on a speech he made Monday offering a series of concessions to the Palestinians if the ceasefire holds, a new Palestinian government accepts international conditions and a captured Israeli soldier is released.