RAMALLAH, West Bank &

Secretary of State Condoleezza Rice said today that "God willing" there could still be a Mideast peace agreement before the end of President Bush's term in office.




"God willing and with the good will of the parties and the tireless work of the parties, we have a good chance of succeeding," Rice said at a joint news conference with Palestinian President Mahmoud Abbas.




Rice was wrapping up a visit to Israel and the Palestinian territories in hopes of furthering the announced goal of brokering a Mideast peace deal by year's end, saying she had "very good" discussions. But she has offered few specific signs of progress.




"They are dealing with all issues before them. No issue is off the table," Rice added, calling the negotiations the "most intensive" since the last round of talks broke down in violence in 2001.




Rice is on her seventh trip to the region since talks were relaunched. While Israel and the Palestinians say all key issues have been under discussion, there has been no word on agreements or breakthroughs.




Both sides had hoped to reach a final peace deal before Bush leaves office in January, but have acknowledged that target is unlikely to be met.




The talks have been complicated by the impending departure of Israeli Prime Minister Ehud Olmert, who has said he will step down to battle a corruption investigation, and the Hamas militant group's control of the Gaza Strip.




Rice repeated the U.S. position that Israel should stop expanding settlements on disputed territory, saying it "is not conducive to creating an environment for negotiations, yet negotiations go on."




Abbas said the settlements "are undoubtedly a main obstacle in the road of the peace process."




"We reject all the settlement activities in principle because they contradict with the agreements and the roadmap plan and the objectives" of the U.S.-sponsored peace conference in Annapolis, Md. last November, Abbas said.




He added, "We have discussed the importance of reaching complete and comprehensive solutions, not partial solutions," Abbas said.




But Rice held out hope today that such an agreement was possible.




"We still have a number of months before us to work toward the Annapolis goal and we're going to do precisely that," Rice said.




Abbas said that was unlikely, saying he hoped the next U.S. president would pick up where the Bush administration has left off.




"We shouldn't lose another seven years searching for solutions. We hope the new administration will continue what we have began, and what we have reached," he said.




"These efforts haven't been for nothing. We would have stopped it if it was pointless. There are benefits that I hope will show in the future," he added.




Israel says it cannot carry out any deal until Abbas regains control of Gaza from Hamas, which violently seized power in the coastal area in June 2007. It also says the moderate government of Palestinian President Mahmoud Abbas, which rules from the West Bank, is not doing enough against militants operating in areas under his control.




The Palestinians, meanwhile, have complained about continued Israeli construction in the West Bank and east Jerusalem &

areas the Palestinians claim for a future independent state. Israel captured both areas in the 1967 Mideast war.




Under the "road map," the international peace plan that serves as the basis of the peace talks, Israel promised to halt all settlement construction. But it has continued to build thousands of homes in areas it hopes to retain under a final peace deal.




The dovish Israeli group Peace Now released a report today saying that while talking peace with the Palestinians, Israel's government has dramatically ratcheted up its construction in the West Bank.




Some 2,600 new homes for Israelis are currently under construction in the West Bank &

an increase of 80 percent over last year, Peace Now said.




In east Jerusalem, which Palestinians want as the capital of their future state, the number of new government bids for construction has increased from 46 in 2007 to 1,761 so far this year, the report said.




Palestinians say the construction undermines the talks and prejudices a final peace deal. But Israeli Foreign Minister Tzipi Livni, Israel's chief negotiator, said the construction would not affect the peace talks.




"In the end of the day, the role of the leaders is to try to find a way to live in peace in the future, and not to let any kind of noises that relate to the situation on the ground these days to enter the negotiation room," she said.




Earlier, Rice met alone with Olmert for an hour, discussing the peace process and other regional issues, Israeli government spokesman Mark Regev said. Israel's government "will continue our efforts to reach a historic agreement before the end of the Bush administration," Regev said.