After five days of shuttle diplomacy, Condoleezza Rice, the US Secretary of State, has returned home empty-handed today having failed to pin down participants, an agenda or even a firm date for a planned Middle East peace conference.

After a punishing round of talks with Israeli, Palestinian and Arab leaders, Dr Rice said that she was “encouraged” by her mission, but admitted that serious obstacles remained.

“The teams are serious, the people are serious, the issues are serious and so I am not surprised that there are some tensions,” she said before a meeting in London today with King Abdullah II of Jordan.

“I am not surprised that there are some ups and downs. That's the character of this kind of endeavour but I was encouraged by what I heard,” she said.

Stephen Hadley, the US National Security Adviser, will travel to the region next week to take up where she left off. Dr Rice is then expected back in the Middle East before the end of the month. By then the Bush Administration hopes to be able to invite participants to a Middle East peace conference in Annapolis, Maryland, to be held by at the end of November or the beginning of December.

The initiative, regarded as the most serious attempt in seven years to tackle the core issues between Israelis and Palestinians, could pave the way for the creation of a Palestinian state.

“The Palestinians that have been made promises all these years need to see there is a serious, focused effort to set up a state,” said President Bush. “And that is important so that the the people who want to reject extremism have something to be for.”

Before the parties can assemble to talk, Ehud Olmert, the Israeli Prime Minister, and Mahmoud Abbas, the Palestinian President, must agree on the wording of a joint declaration.

The two sides are deadlocked over how to address the thorny issues of the future Israeli-Palestinian borders, the fate of millions of Palestinian refugees and the status of Jerusalem, claimed by both sides as their capitals.

The Palestinians are demanding that the negotiating document address the issues in detail and have also called for a timetable. The Israelis favour outlining the issues “in broad brushstrokes” and are resisting what they fear could become a deadline.

Mr Abbas said that the Palestinians would not attend the peace conference unless it was clear beforehand that their demands would be addressed. “We cannot go to the meeting at any cost,” he said, adding that he wanted “a clear document and deadline to reach a definitive result”.

While the Israelis will be reluctant to commit themselves to any big concessions, they do not want to be blamed for undermining an initiative begun by their main ally. They also stand to gain by attending the conference, which is expected to be attended by several Arab states, including Egypt, Jordan, Saudi Arabia, some Gulf countries and possibly Syria.

Even if Dr Rice can mediate between the two parties, diplomats engaged in the process remain doubtful that any real breakthrough is possible while the key players in the Middle East peace process are so weak.

Mr Olmert is clinging to power in the face of growing opposition. Mr Bush is widely seen in the region as a lame-duck president, with only a year to go before elections in America. Mr Abbas may be president, but his Fatah faction has been badly weakened, since its eviction earlier this year by the Hamas, the Islamic militant group.

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