Clinton meets Abbas amid Middle East peace moves
US Secretary of State Hillary Clinton has met Palestinian President Mahmoud Abbas to conclude three days of talks with Israeli and Palestinian leaders.
With no sign of a deal on settlement building in the West Bank, Mr Abbas said there was no choice but to continue negotiating.
President Mubarak of Egypt has urged Israel to extend the partial ban on construction for three months.
Mrs Clinton repeated her confidence that all core issues could be resolved.
As Mrs Clinton arrived in Ramallah in the West Bank, Mr Abbas said everyone knew there was no alternative to peace through negotiations.
"So we have no alternative other than to continue these efforts," he said.
The Palestinian leader acknowledged that conditions were difficult, and a senior Palestinian official was quoted as saying that broad gaps remained on the question of settlements.
Neither Mrs Clinton nor Mr Abbas spoke after the meeting.
The US secretary of state then travelled to Jordan for a meeting with King Abdullah II. Jordan already has a peace treaty with Israel, and King Abdullah took part in the resumption of talks in Washington earlier this month.
At a news conference in Amman, Mrs Clinton said she had expressed her confidence during the meeting that Mr Netanyahu and President Abbas could make "the difficult decisions necessary to resolve all of the core issues within one year".
"They are committed. They have begun to grapple with the hard but necessary questions," she said.
Meanwhile, US envoy George Mitchell was due to meet Syrian President Bashar al-Assad in Damascus in an effort to revive Syrian-Israeli peace talks, and was then planning to go on to Lebanon.
Egyptian President Hosni Mubarak has become the latest figure to urge Israel to extend its 10-month partial moratorium on construction work in Jewish settlements.
Israel has so far refused to renew the restrictions, which are due to expire on 26 September.
In comments broadcast on Israel Radio, Mr Mubarak said he had urged Israeli Prime Minister Benjamin Netanyahu to allow another three months for the talks to bear fruit.
In that period, he suggested, the two sides could have sufficient time to draft future borders. If agreement were to be reached, then building could resume along those lines.
Mr Netanyahu's office said he was standing by his position not to prolong the moratorium, although he has recently indicated that limits would be placed on construction.
During Wednesday's three-way talks in Jerusalem, Mr Mitchell said Israeli and Palestinian leaders had made "progress" on the issue of Jewish West Bank settlements although he gave no further details.
Mr Mitchell said the two leaders had tackled the issues at the heart of their decades-old conflict - Israel's security, the borders of a future Palestinian state, the fate of Palestinian refugees and the status of Jerusalem.
"The two leaders are not leaving the tough issues to the end of their discussions," Mr Mitchell said. "We take this as a strong indicator of their belief that peace is possible."
In a symbolic move, Mr Netanyahu placed a Palestinian flag alongside the US and Israeli flags at a joint appearance at his official residence in Jerusalem, following a custom started by his predecessor, Ehud Olmert.
It was a first for Mr Netanyahu, who only endorsed the idea of creating a Palestinian state a year ago.
Nearly half a million Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem.
They are held to be illegal under international law, although Israel disputes this.
Meanwhile, Israeli aircraft have attacked the Gaza Strip following Palestinian rocket and mortar attacks.
Gaza is controlled by the Islamist group Hamas, while Mr Abbas heads the Palestinian Authority, which controls Palestinian areas of the West Bank.
As the leaders held talks in Jerusalem on Wednesday, Palestinian militants fired a rocket at the southern port city of Ashkelon, along with several rounds of mortar fire along the Gaza-Israel border, the Israeli military said.
In response, the Israeli air force bombed southern Gaza, killing one Palestinian and wounding two.
It followed up with an overnight raid on two suspected weapons caches in the northern and southern Gaza Strip, the military said. Gaza's governing Hamas movement said one of the sites hit was a soap factory.
The Popular Resistance Committees, a small militant group opposed to the talks, said it was behind the Palestinian militant attacks, which caused no casualties.
Although Hamas militants were not believed to have launched the attacks, Israeli officials accused the group of turning a blind eye to the activities of other factions in the territory that are opposed to the peace talks.