Israeli and Palestinian leaders appeared close to a breakthrough last night in efforts to kick-start the Middle East peace process.

As President Bush opened a three-day summit in Washington, Israel and the Palestinians said that they were near agreement on a joint document outlining the terms of new negotiations. The document, which the parties had previously failed to agree, could trigger within days the first formal peace talks between two sides for seven years.

Yesterday Mr Bush held separate White House talks with Ehud Olmert, the Israeli Prime Minister, and Mahmoud Abbas, the Palestinian President. According to White House press secretary Dana Perino, he called on them to “seize the moment.”

“He said history is full of missed opportunities because people just looked to the downside,” she said.

The summit, which aims to lay the ground for new talks between Israel and the Palestinian Authority, is being attended by nearly 50 countries, including a record 17 Arab nations. Both Syria and Saudi Arabia are present — the first time Saudi officials have sat with Israelis to talk about peace in the Middle East.

Mr Bush, who says he is “personally committed” to resolving the conflict, told Mr Olmert before their meeting: “I’m looking forward to continuing our serious dialogue with you and the President of the Palestinian Authority to see whether or not peace is possible. I’m optimistic.”

Mr Olmert said: “We and the Palestinians will sit together in Jerusalem and work out something that will be very good.” Later, before his meeting with Mr Bush, Mr Abbas said: “We have hope that this conference will produce negotiations . . . that will lead to a peace agreement.”

The multination leg of the conference begins today, in the US Naval base at Annapolis, Maryland, where Mr Bush will hold three-way talks with Mr Abbas and Mr Olmert. The trio will then return to the White House tomorrow for another round of separate meetings.

Despite their stated optimism, however, expectations for the Annapolis summit, and a genuine peace deal to follow, remain low.

Because negotiating a basic joint agreement on the broad terms for negotiations has been so problematic, it is a reflection of how far apart the parties are on the fundamental issues that have blocked numerous other failed attempts at peace.

Analysts believe that resolving those issues, including final borders, sovereignty over disputed Jerusalem and the fate of Palestinian refugees who lost land after the creation of Israel in 1948, requires leaders with strong public backing at home.

Mr Abbas and Mr Olmert are both domestically weak. Mr Abbas has lost control of the Gaza Strip to the militant Islamic faction Hamas, which has not been invited to the conference. There is also deep scepticism on the West Bank — seat of his Palestinian Authority Government — that he can deliver a Palestinian state. Mr Olmert is also unpopular at home, with some political rivals hoping his efforts at reviving peace talks will fail.

Mr Bush is the latest in a long line of American presidents to try to broker peace in the Middle East. There have been nearly forty diplomatic initiatives by the US since the Six-Day War in 1967. John Bolton, Mr Bush’s former UN Ambassador, said that the timing for the conference in Annapolis could not have been worse. “This is the least propitious time to have a peace conference that I can imagine with a weak Israeli Government and a Palestinian Authority in collapse,” he told The Times. “I do not see much prospect of anything happening.”

Carl Bildt, the Swedish Foreign Minister, said that failure could strengthen Palestinian extremists.

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