Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas met Monday to discuss guidelines for resuming peace negotiations, the prime minister's office said.

Aides for both leaders said they would talk about issues connected with Palestinian statehood as well as day-to-day security and economic matters.

Before the meeting at Olmert's Jerusalem residence, Israeli and Palestinian leaders were sharply divided over how far they need to go on peacemaking to ensure the success of an upcoming international peace conference.

Clouding the climate for the latest talks between Olmert and Abbas were Israeli warnings against outsized expectations of the U.S.-sponsored peace conference tentatively planned for November, and Arab warnings that the conference was doomed to fail without a breakthrough beforehand.

The key issues that have stymied progress toward Palestinian statehood are final borders; who will rule disputed Jerusalem; and a solution for Palestinian refugees from the 1948 Mideast war that accompanied Israel's creation.

President Bush called for the conference in July to re-energize the stalled peace process, but the specific agenda remains unclear.

Palestinian Prime Minister Salam Fayyad said during the weekend that the conference must produce an "explicit agreement on the establishment of a Palestinian state," as well as a binding timetable and international guarantees for the completion of an Israeli-Palestinian agreement. Abbas has warned repeatedly that if the Washington conference didn't move past overly general statements to detailed discussions, the conference would fail.

Israel has been less committal about taking on the most contentious issues of Palestinian statehood, though Olmert did address them in general terms at his last meeting with Abbas two weeks ago.

Israeli government spokeswoman Miri Eisin said the two sides would discuss the "political horizon" — a reference to the overall concept of what a future Palestinian state would look like. But not all issues will be resolved by November, she said.

"We think the capabilities of the Palestinians to rule, to govern, is an important step to go to the final status negotiations," she said.

Sami Abu Zuhri, a spokesman for the Hamas rulers of Gaza, predicted nothing would come of the Abbas-Olmert meeting.

"The Zionist government previously announced that it would not engage in final status issues and would not accept an end to incursions, assassinations and all the daily crimes," Abu Zuhri said. "So can we expect anything fruitful from such meetings?"

Arab leaders said Sunday that a clear agenda was crucial to ensure the conference be a major milestone toward a final settlement.

"Until now, I personally, see that there is no clear agenda, and I don't even know if it will be a conference or a one-day meeting as some circles recently talked about," Egyptian President Hosni Mubarak said.

And Jordan's King Abdullah II said the core issues "must top the agenda of the conference."

Saudi Arabia has said it wouldn't come unless Israel and the Palestinians reach an agreement beforehand on the conflict's core issues.

Secretary of State Condoleezza Rice is expected in the Middle East next week to try to get the sides to agree on an outline for a future peace agreement ahead of the conference.

And the so-called Quartet of Mideast mediators — the U.S., European Union, Russia and U.N. — is to convene in Washington in late September and meet Arab League representatives who have been promoting an Arab plan for a comprehensive peace with Israel.