SHARM EL-SHEIKH, Egypt -- Under pressure to compromise, Israeli and Palestinian leaders on Tuesday dug into the central issues blocking a peace deal but the latest talks produced no visible progress on the divisive issue of Jewish settlements.
Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas held an extra, unscheduled session with U.S. Secretary of State Hillary Rodham Clinton, but there was no word on signs of a breakthrough. After the leaders' first meeting at this Red Sea resort, U.S. peace envoy George Mitchell offered reporters a mildly positive assessment.
Mitchell said the core issues in the peace process were discussed, but all sides agreed not to reveal which ones or with what results.
"I'm not going to attempt to identify each one that was discussed, but several were in a very serious, detailed and extensive discussion," Mitchell said at a news conference.
Israeli officials said Sharm el-Sheikh was chosen for Tuesday's meeting in recognition of Egypt's key role in regional peace efforts. "We were guests of the Egyptian President Mubarak," said Mark Regev, Netanyahu's spokesman. "Egypt plays an important role in supporting this process."
The leaders move on to the holy city of Jerusalem for more discussions Wednesday in another symbolic gesture aimed at underscoring the importance of the negotiations, the first direct talks between the Israelis and Palestinians in almost two years.
The status of Jerusalem is one of the thorniest issues dividing the two sides. Israel claims the undivided city as its capital, while the Palestinians want the eastern part to be the capital of an eventual state.
Clinton did not comment, but told reporters on the flight to Egypt from Washington on Monday that "the time is ripe" for an agreement based on the notion of a sovereign Palestinian state and a secure Israel.
Mitchell was pressed to say whether there was progress on settlements and responded: "We continue our efforts to make progress and we believe that we are moving in the right direction, overall."
He repeated Clinton's call for Israel to extend its soon-to-expire curb on settlement construction in the West Bank.
"We think it makes sense to extend the moratorium, especially given that the talks are moving in a constructive direction," he said. "We know this is a politically sensitive issue in Israel. But we've also called on President Abbas to take steps that help encourage and facilitate this process."
Palestinian spokesman Nabil Abu Rdeneh described the negotiations as "serious and deep, but the obstacle of settlements still exists."
The ultimate aim is a deal that creates a sovereign Palestinian state beside a secure Israel.
Regev, Netanyahu's spokesman, said much work lay ahead and that the Palestinian and Israeli leaders have to make hard decisions. "The way to an agreement is to look at all the core issues together, not to run away from any one of them," he said.
The Palestinians want Israel's settlement curb extended beyond the current Sept. 26 deadline and have said failure to do so will bring the peace talks to an early end. Netanyahu has suggested at least some of the restraints will be lifted.
Clinton said the Obama administration believes Israel should extend the moratorium, but she also said it would take an effort by both sides to find a way around the problem. She spoke with reporters Monday during a flight from Washington to Egypt for the latest round of talks, which began this month in Washington.
The settlement freeze is not the only obstacle negotiators face. The two sides disagree over what to discuss first: security or borders.
A senior Abbas aide, Mohammed Ishtayeh, appeared to take a hard line on the issue of settlement construction, telling reporters that an Israeli extension of its partial freeze would not signal progress in the negotiations but rather progress in "confidence building."
"The freeze on settlements (construction) is not a topic in the negotiations," he said. "Removing settlements is."
From the Israeli said, Netanyahu spokesman Mark Regev said, "If the expectation is that only Israel has to show flexibility then that is not a prescription for a successful process."
The Palestinian group Hamas, which rules the Gaza Strip and doesn't recognize Israel, isn't party to the negotiations. Hamas spokesman Ismail Ridwan described the negotiations as a "shameful path" and said they would not benefit the Palestinians. "Instead, they will serve the (Israeli) occupation and provide it with a green light to continue its crimes," he said.
Ahmed Jaabari, the shadowy leader of Hamas' military wing, threatened a wave of violence intended to derail the talks.
As evidence of the tense situation with Gaza, Hamas security officials said four Palestinians in northern Gaza were wounded by an Israeli tank shell. The Israeli military said soldiers opened fire after a group of Palestinian militants approached the border and fired a rocket-propelled grenade.
Clashes along the border between Israel and Gaza are common. Soldiers this week killed three Palestinians after coming under fire from Gaza.
Israeli Interior Minister Eli Yishai spoke out Tuesday against the settlement slowdown, reflecting the intense pressure on Netanyahu to resume construction once the moratorium ends.
"The freeze in the West Bank is incorrect and its good that it is ending," Yishai told Israel Radio as the meetings in Egypt were taking place.
On Sunday, Netanyahu seemed to reject a total freeze on construction. He said Israel would not build thousands of planned homes. But without providing details or a timeline, he said, "We will not freeze the lives of the residents."
Although some analysts caution that any peace deal faces daunting obstacles, Clinton has said an initial round of talks in Washington on Sept. 2 generated some momentum.