Mid-East Progress Report

The news of continued negotiations comes as the peace process goes through a lull due to the political changes in the US and Israel.

"We, both of us, affirmed that we will continue in these negotiations and that we will not stop even as Israel prepares to go for elections," Abbas told a joint news conference with Livni. "Our meetings will continue as usual," he added.

For her part, Livni said that the continued talks, aimed at forging an Israeli-Palestinian peace resulting in a Palestinian state, would continue the framework agreed on at last year's Annapolis peace summit, when the sides agreed to rekindle the negotiations after a seven-year hiatus.

"The Annapolis process serves the interest of both parties, the Israeli and Palestinian," she said.

Quartet pledges further support

The process' sponsors -- the so-called Quartet of the US, Russia, the European Union and the United Nations -- said in a statement that they would continue their commitment supporting the parties efforts and also pledged to "respect the bilateral and confidential nature of the negotiations."

Renewed officially at the turn of the year, the negotiations, headed by Livni for the Israelis and former-premier Ahmed Quriea for the Palestinians, have been conducted amid a virtual media blackout, with concomitant conflicting reports of the progress being made.

But according to an Israeli Foreign Ministry communiqué, Livni told the Quartet Sunday that "real and intensive progress" has been made, and the sides believed they had the elements, guiding principles and trust needed to create a good basis for a deal.

At Annapolis Abbas and Israeli Prime Minister Ehud Olmert pledged to try and secure a treaty by the end of the year, but on Thursday US Secretary of State Condoleezza Rice conceded that this is unlikely to happen, as Israel heads for elections early next year.

Fears have also been expressed that the transition period in the US, as president-elect Barack Obama prepares to take office, may affect the momentum of the talks.

Tough issues under negotiation

Officials from both sides have said that it is proving difficult to reach agreement on the many tough issues that are under negotiations which include the future of East Jerusalem, the fate of Palestinian refugees, the borders and management of natural resources, especially water.

Both Israelis and Palestinians say they need more time to agree. East Jerusalem is proving to be an especially tough issue to settle, and an Israeli trial balloon, to conclude a partial agreement without it, was quickly shot down by the Palestinians.

In Sharm el-Sheikh on Sunday, neither Livni nor Abbas expressed any indication of how much longer the two sides would need to conclude an agreement according to the Annapolis framework, but both agreed and said that nothing is done until it is actually done.

Abbas and Livni did not take any questions from the press. However, speaking privately their aides said that each side was more or less satisfied with the outcome of the Sharm el-Sheikh meeting.

The Israelis said that they were pleased with the consensus they have with the Palestinians and the international community as represented in the Quartet to "stick to the Annapolis process".

"It is important that we don't keep seeing new initiatives being offered every day. This will complicate matters," said one Israeli source who spoke on condition of anonymity to the DPA news agency.

Livni had called on the international community not to intervene in the talks by submitting "bridging proposals and initiatives which do not suit reality."

The Palestinians said they were also pleased with the understanding the Quartet demonstrated for their determination to secure a comprehensive settlement.

"We cannot go back to our people with bits and pieces. The Palestinians have suffered for a long time and now they want to see the final peace deal and their state," said a Palestinian source, who asked not to be named.

Israel also received more assurances from the Palestinians, the Egyptian host of the meeting and the Quartet members that all efforts will be duly exerted to observe their security concerns, diplomatic sources said.

Envoy Blair promises continued economic aid

The Palestinians received promises that economic aid will be sustained. Tony Blair, the Quartet envoy to the Middle East, who is in charge of observing the flow of international financial aid to the Palestinians said Sunday that he would continue to work for the support of Palestinian economy and for the upgrade of Palestinian security.

The Palestinians, however, did not get a mechanism they demanded, to be in charge of following up on Israeli commitments to ease economic and security sanctions on Palestinian territories.

UN Secretary-General Ban Ki-moon said Sunday in a press conference that "the Quartet is the mechanism."