An upcoming U.S.-sponsored Mideast conference must be substantive, and Israel and the Palestinians should draft a document beforehand that lays the foundation for serious peace talks, U.S. Secretary of State Condoleezza Rice said Thursday, after meeting Palestinian leaders.

The Palestinians want the conference, tentatively set for November, to yield an outline for a peace deal, complete with timetable, while Israel wants a vaguer declaration of intent. Key Arab states, such as Saudi Arabia, have said they would only attend if concrete results are achieved.

The U.S. has not yet set a date or released a list of those attending.

Rice told a news conference, with Palestinian President Mahmoud Abbas by her side, that the meeting must be "substantive" and that participants must not "simply meet for the sake of meeting."

"I will work, I know that the president and (Israeli) Prime Minister Olmert will work, and their teams will work very aggressively, very urgently to lay the groundwork for a successful meeting," she said.

The two sides should draft a document before the conference that will "lay the foundations for serious negotiations," she said, before returning to Jerusalem for talks with the Israeli leader.

An Abbas aide, Nabil Amr, said the secretary of state told Abbas that hardest issues — borders of a future Palestinian state, the fate of refugees, the status of Jerusalem — would be discussed.

"The meeting was successful from our point of view, because Rice has reassured President Abbas that the conference will address the core issues," Amr said.

Israel has said it is premature to discuss the thorniest issues at the core of the Mideast conflict.

The Hamas rulers of Gaza played down the importance of the conference. "Any agreement that might result from the U.S.-designed peace conference this fall will not be binding for the Palestinian people," Hamas government spokesman Taher Nunu told the local Al Quds radio station in Gaza.

Israel and the U.S. have expressed great hope that they can make great progress in peace efforts with Abbas' new moderate government, based in the West Bank.

Before the meeting, Abbas aides said he would urge Rice to invite all relevant Arab states to the conference, including Syria and Lebanon, and not to set a date for the gathering unless a successful outcome is assured.

Abbas said he believes some Arab countries are hesitant to confirm attendance because the objectives are not clear.

"I think many issues need to be clarified and I think it's the duty of the hosts of the conference," he said, referring to the U.S. "When things are clarified, I think the Arab countries, and I'm not ... speaking on their behalf, will attend that conference," he said.

Abbas said he expects the conference to launch serious negotiations with Israel.

"We believe the time is right for the establishment of an independent Palestinian state, with east Jerusalem as its capital, and for living side by side in peace and security with the state of Israel," Abbas said.

Abbas and Israeli Prime Minister Ehud Olmert have held periodic talks in recent months, and agreed to set up negotiating teams that would try to reach the general outline of a peace deal ahead of the conference.

Abbas said he informed Rice of the composition of the Palestinian negotiating team. He didn't announce the names publicly, but his aides said it will be headed by former Palestinian Prime Minister Ahmed Qureia, who led interim peace talks with Israel in the 1990s.

Abbas, meanwhile, said he is to meet next week with U.S. President George W. Bush during the U.N. General Assembly in New York. The two leaders last met a year ago, also during the General Assembly.

Amid the latest peace moves, the Israeli army pushed forward with a raid in the West Bank city of Nablus for a third day, confining some 5,000 residents of a refugee camp to their homes.

Israeli troops, backed by tanks and bulldozers, launched the raid in the Ein Bet Ilmeh refugee camp on Tuesday in an attempt to root out a cell of Palestinian militants.

Abbas called for a halt to the "invasion of Nablus and its refugee camps," which he said was the most recent example of Israel's "policy of invasion."

The Haaretz daily reported on its Web site that Israel had captured the wanted militants. The army could not confirm the report.

Thursday's meetings also were overshadowed by Israel's decision Wednesday to designate Hamas-ruled Gaza as "hostile territory," accompanied by a threat to cut back vital supplies of fuel and electricity.

Abbas denounced the decision as "oppressive." However, Abbas didn't call off peace efforts with Israel in response to the move.

Olmert's office said the decision still required a legal review, suggesting it could be a means to pressure Gaza militants to halt rocket fire. As of Thursday, there were no signs that the sanctions had gone into effect.

But Israel's threat is likely to reinforce perceptions among Palestinians and their Arab backers that Israel will do as it sees fit regardless of the cost to civilians, and that the U.S. will not block Israel's hand.

Asked to comment on the decision Wednesday, Rice promised to protect "innocent Palestinians" in Gaza. But she did not criticize the Israeli move, saying, "Hamas is a hostile entity to the United States as well."

Abbas, too, is in a bitter struggle with Gaza's Hamas rulers, who seized control of the coastal strip in June and forced him to set up a separate government in the West Bank.

The violent Islamic Jihad group, meanwhile, said Thursday it would not halt rocket fire on Israel, despite Israel's threats. Abu Ahmed, a spokesman for Islamic Jihad militants, said that "rockets are an affirmation of our option of continuing holy war and resistance against the occupation."