US push to break Mid-East deadlock

US-Israeli talks: The US now sees a window of opportunity

US Secretary of State Madeleine Albright has met Israeli and Palestinian negotiators in New York in a new intensive drive to clinch a Middle East peace deal.

The latest round of talks started amid signs that both sides were examining new proposals for resolving the contentious status of Jerusalem.

There is a great deal of very imaginative work going on, a lot of brainpower

Madeleine Albright

Mrs Albright had talks with a Palestinian team led by Saeb Erekat and later dined with the interim Israeli Foreign Minister, Shlomo Ben-Ami.

One proposal for Jerusalem is reported to involve allowing the United Nations Security Council to oversee the city's holy sites.

US Middle East envoy Dennis Ross also held separate talks with Israeli and Palestinian negotiators.

Holy city: A Gaza billboard shows Yasser Arafat and the Dome of the Rock in Jerusalem

"There has been no breakthrough, but there has been no breakdown either," said US State Department spokesman Richard Boucher.

"Our sense is that the parties have a desire to go on and reach a conclusion, so we'll continue to work step by step."

Search for acceptable formula

Mrs Albright said the talks could move either to Washington or the Middle East, and the United States would bring the two sides together "if it makes sense".

"There is a great deal of very imaginative work going on, a lot of brainpower," she added.

"Neither side can have 100% of what it wants. We can't come out of this where one side feels that it has won and the other lost."

Palestinian negotiator Nabil Shaath said the New York meetings reflected a "change of tactics" by the US.

Jerusalem focus

He said the Palestinians wanted to widen the scope of the talks to cover other issues, alongside the Jerusalem holy places.

He said the focus on Jerusalem in the past few weeks had "made it impossible to move on anything else".

Both Israel and the Palestinians claim the city as a capital.

A peace agreement would also cover other key issues including Palestinian refugees, Jewish settlements and the borders of a Palestinian state.

Mr Shaath said the Palestinian leader, Yasser Arafat, had proposed that sovereignty over the Jerusalem holy sites be vested in the Jerusalem committee of the Islamic Conference Organisation. Functional control would be in the hands of the government of a Palestinian state.

Mr Ben-Ami paid tribute to US President Bill Clinton and Mrs Albright for their efforts at the failed Camp David summit in July.

He said that summit had turned the "sea" of differences between Israel and the Palestinians into a "river".