Secretary of State Colin Powell (search) gave fresh encouragement Thursday to private peace efforts in the Middle East, meeting with a moderate Palestinian whose grass-roots movement seeks Israel's withdrawal from the West Bank and Gaza.

While his Israeli partner was delayed in New York, Palestinian intellectual Sari Nusseibeh outlined their proposal to Powell and two senior deputies. Nusseibeh said the plan would complement a U.S.-backed blueprint intended to create a Palestinian state in 2005.

"The secretary welcomed our effort," Nusseibeh said.

The meeting was similar to one Powell had last week with former Israeli negotiator Yossi Beilin and Palestine Liberation Organization (search) official Yasser Abed-Rabbo, who are promoting a peace treaty on their own.

Powell has said he is open to suggestions for dealing with the Israeli-Palestinian standoff.

The secretary was to meet at the State Department on Friday with Israel's foreign minister Silvan Shalom, who has offered to work with the Palestinian Authority to promote security and economic reform.

But at a meeting in Rome with European nations that help finance the authority, department official David Satterfield said, "The Israeli government has done too little for far too long to translate its repeatedly stated commitment to facilitate Palestinian reform into reality."

Nusseibeh and former Israeli security chief Ami Ayalon hope to win over American, Israeli and Palestinian leaders by creating a groundswell among Israelis and Palestinians. Nusseibeh said about 130,000 Israelis and 65,000 Palestinians have signed on in support of their plan.

Also Thursday, Yair Hirschfeld, who helped negotiate an Israeli pullback on the West Bank 10 years ago, called on the National Security Council's Rob Dineen, who works on Mideast issues. And the White House again renewed permission for the PLO to maintain an office in Washington for six more months.

State Department spokesman Richard Boucher (search) rejected any suggestion of a shift in U.S. policy as a result of the Washington meetings with the two teams of would-be peacemakers. "We talk to all kinds of groups," he said.

Still, few outsiders attract the attention given the Israelis and Palestinians.

Joining Powell in the meeting were Deputy Secretary of State Richard Armitage and Assistant Secretary of State William Burns. Last month, Deputy Defense Secretary Paul Wolfowitz met with Nusseibeh and Ayalon and praised their work.

Boucher confirmed that Powell and Armitage had met Wednesday with Brig. Omar Suleiman, the Egyptian intelligence chief. He also meet with CIA Director George Tenet.

Egypt failed last weekend in its effort to arrange a cease-fire to stop attacks on Israel by extremist Palestinian groups.

"That's an issue we discussed at some length with him," Boucher said.

Ayalon is a retired admiral with a liberal bent. In Israel, he is considered a potential leader of the left who is opposed to hard-line Prime Minister Ariel Sharon. Nusseibeh is a moderate who rejects militant Islam and is president of Al-Quds University.

Ayalon and Nusseibeh have developed a plan that would establish a Palestinian state on the West Bank and in Gaza generally along the borders that existed before Israel defeated Arab nations in the 1967 Mideast war and took control of those territories.

Jerusalem, which Israel considers its historic capital, would be shared with the Palestinians and each side would administer its own holy sites, according to their plan. Palestinian refugees would give up their claim to homes in Israel they say they were forced to abandon during Israel's war for independence in 1948.