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Rice: Mideast peace deal possible by end of year

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  • Condoleezza Rice: Middle East peace agreement possible this year
  • U.S. secretary of state holds meetings with Israeli PM, Palestinian president
  • Talks with Israeli PM Olmert overshadowed by police investigation
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RAMALLAH, West Bank (CNN) -- Laying the groundwork for President Bush's upcoming trip to the Middle East, U.S. Secretary of State Condoleezza Rice said Sunday a peace agreement between Israel and the Palestinians can be reached by the year's end.

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Condoleezza Rice held talks with Palestinian and Israeli leaders.

"This is very painstaking work ... it is labor-intensive work but it is necessary work," Rice said at a joint news conference with Palestinian President Mahmoud Abbas.

"We continue to believe that it is an achievable goal to have an agreement between the Palestinians and the Israelis by the end of the year and by the end of President Bush's term."

Rice met Saturday night and Sunday morning with Israeli Prime Minister Ehud Olmert. Her visit -- one of many she has made in recent months -- has been overshadowed by a police investigation into Olmert, who was questioned by police Friday. Video Watch Rice with the Israeli foreign minister »

In absence of any official details, the Israeli media has been rife with what Olmert called "a wave of rumors about the issues of the interrogation."

Olmert vowed to continue as prime minister, although his critics have called on him to step down, saying his position has been weakened by the investigation.

"I have priorities as prime minister of Israel," he said in a statement released by his office. "I intend to uphold these priorities and continue to hold the meetings, carry out the responsibilities and do the things, that I must."

Authorities are investigating numerous allegations involving Olmert, including that he bought a house in an upscale Jerusalem neighborhood for below-market value in return for favors.

They also are investigating an alleged $10 million business deal that he participated in while he was labor minister; that deal involved his former business partner.

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Rice is scheduled to depart for Washington on Monday. Ahead of her trip to the region, she met with representatives of the Mideast Quartet which, along with the United States, includes the United Nations, Russia, and the European Union. Video Watch a report on Rice's goals »

Bush is scheduled to travel to Israel on May 13 to mark the Jewish state's 60th anniversary and its close ties with the United States. White House spokeswoman Dana Perino said Bush has no plans to travel to the West Bank for talks with the Palestinian leadership during that trip. E-mail to a friend E-mail to a friend

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