WYE MILLS, Maryland (CNN) -- Marathon Mideast peace talks carried into the early hours Tuesday with Palestinian and Israeli negotiators resuming talks on all issues, including safe passage, the Gaza airport and economic issues.

The talks recessed around 12:30 a.m. EDT (0430 GMT) but were to resume later Tuesday as negotiators work to hammer out an interim peace deal.

U.S. President Bill Clinton, Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Yasser Arafat met throughout Monday and were said to be discussing a "total comprehensive package," not just a partial deal.

The three-way summit, marking the first time Netanyahu and Arafat had met since Friday, was one of the few positive signs on a day that began with a grenade attack in Israel.

Clinton also met with Secretary of State Madeline Albright before heading back to the White House. The president canceled a planned trip to California Tuesday that was to raise money and support for Sen. Barbara Boxer and other congressional Democrats two weeks before the elections.

"Given the importance of the issues at hand, the president and Prime Minister Netanyahu and Chairman Arafat believe it is appropriate to stay and work on these important issues," White House spokesman Joe Lockhart said.

Despite Monday's attack, Clinton hopes both sides will make the 'hard decisions necessary to move this peace process forward.' ( 388 K/29 sec. AIFF or WAV sound)

State Department spokesman James Rubin described the mood at the talks as "workmanlike."

"We do not know how or where this will end up," he said. "It is not a waste of time, but the incident in Beersheba made it more difficult to achieve the results we were trying to reach."

The talks were rocked Monday morning when police said a Palestinian man threw two grenades at a bus stop in the southern Israeli town of Beersheba, wounding dozens of people.

Before the trilateral talks began, both Middle Eastern leaders had a separate, half-hour meeting with the U.S. president. Clinton, Albright and National Security Adviser Sandy Berger also spent about 45 minutes in discussions with two security experts from the Israeli and Palestinian delegations.

With interim peace talks between Israelis and Palestinians imperiled by a terror attack, Clinton flew from Washington to the summit site in Maryland, encouraging both sides "to make the hard decisions necessary" to move the process forward.

At midmorning, following a meeting of his top advisers including hard-line Foreign Minister Ariel Sharon, Netanyahu announced the Israeli side would focus on security, setting aside all other issues.

"The Palestinian Authority must fight terrorism in words and deeds," said Netanyahu. "Without compliance with the Palestinian security commitments, there can be no agreement."

RELATED VIDEO
CNN's Andrea Koppel reports the grenade attack in Israel affected the talks Monday
Windows Media	28K	56K

CNN was told Arafat had called Netanyahu Monday morning to condemn the Beersheba attack, calling it "regrettable" and promising the Palestinian Authority would investigate.

Later, it was learned that Jordan's King Hussein had left his hospital bed at the Mayo Clinic in Rochester, Minnesota, where he is being treated for cancer, to fly to Washington to make himself available.

The PLO ambassador to the United States, Hassan Abdel Rahman, said the attack should serve as an incentive to accelerate the negotiations and warned the Israelis may use the incident to walk away from the talks.

"If Mr. Netanyahu is looking for a pretext to stop the negotiations and undermine the process, he will always find one. This attack, which we have condemned, should serve as an incentive to accelerate the negotiations," said Rahman. "If this is his condition to go ahead, it reflects lack of political will to proceed with the peace process and lack of seriousness."

Clinton conceded that the attack was a "complicating factor" but added, "I am convinced that reaching a peace between Israelis and Palestinians is the best way to ensure that terrorism has no future in the Middle East."

He said he was returning to urge the two sides to make "hard decisions" but he warned the United States can only do so much.

"Ultimately only the parties themselves can bridge their differences and put their people on a more hopeful course," he said.

The United States invited the two sides to Washington last week in the hope that they could settle on a proposal to move the stalled talks forward in a way that will lead to final status negotiations.

Over the weekend and into Monday, there appeared to be some movement. Palestinian sources said Clinton had brought to Arafat a partial agreement which the president said Netanyahu had agreed to. Arafat sent Clinton back to the Israelis, saying he wanted a complete agreement.

The partial package would have included a 13 percent withdrawal by Israel from West Bank territory, an agreement on security issues, an agreement on the establishment of a Palestinian airport and safe passage for Palestinians.

The partial agreement also provided for the release of a limited number of Palestinian prisoners held in Israeli custody, a Palestinian source said.

The partial agreement did not address two key points Arafat wanted addressed, the sources said -- a third phase of Israeli troop withdrawals and the status of all Palestinian prisoners held by Israel.