"The prime minister (Ehud Olmert) said to me that he will support new discussions with you and that he is ready to discuss the fundamental issues that will lead to negotiations soon for the creation of a Palestinian state," Rice told Abbas at a joint press conference in Ramallah.

When asked to elaborate, she said: "I think the word fundamental speaks for itself... I think the desire to move towards a two-state solution seems to be there on both sides."

It was not clear from her remarks, however, whether Olmert had agreed to discuss "core issues" as the Palestinians have been pushing for months -- the thorniest problems of the conflict such as the status of Jerusalem and borders.

Israeli officials had said earlier that Israel wanted to agree a framework on these issues before the international Middle East peace conference that US President George W. Bush has called for later in the year.

"We must reach an agreement with the Palestinians on the framework of the final status issues, which will guarantee a clear diplomatic and security horizon for both sides," a senior Israeli government official quoted Haim Ramon, minister without portfolio, as telling Rice on Thursday.

"This should happen before the summit in November," said Ramon, one of the Olmert's closest allies.

The conference is expected to take place in the autumn after the end of the Jewish and Muslim holidays in mid-October, a senior US official said.

"All negotiations to reach a final agreement must include the principles contained in the international roadmap (for Middle East peace)," Abbas said.

Rice's trip was her first to the Palestinian territories since Hamas seized the Gaza Strip in mid-June and came at the end of a regional tour aimed at building on diplomatic momentum to lay the groundwork for the conference.

The bloody routing of forces loyal to the moderate Abbas from Gaza by the Islamists of Hamas fuelled new diplomatic drives to revive Israeli-Palestinian peace talks, which have been dormant for more than six years.