Middle East deal possible by end of 2008 - Quartet

Israel and the Palestinians could reach agreement by the end of the year, leading to the creation of a separate Palestinian state. That's according to the Quartet of Middle East mediators. The group, which includes Russia, the U.S., the UN and the EU, met

Speaking after talks, U.S. Secretary of State Condoleezza Rice said there was an opportunity for the two sides to clinch an historic deal.

“I believe that they do have a chance to get an agreement by the end of the year, and that's what we're going to work for everyday,” said Condoleezza Rice, U.S. Secretary of State.

Negotiations between Palestine and Israel were restarted last year in Annapolis in the U.S. after being frozen for seven years. But progress has been limited because of factional fighting among Palestinians.

Hamas, a rival to the ruling Fatah party, has taken control of the Gaza strip and it’s military division is using it as a base to launch rocket attacks against Israel.

Tel-Aviv reacted by imposing a blockade on the coastal strip, cutting it off from vital supplies of goods and food.

Official Envoy of the Quartet, Tony Blair, said a breakthrough requires a number of hard compromises.

“Yes we need to lift the occupation. But this thing can't be solved I'm afraid just by a slogan that says: lifting the occupation. Because the occupation is the problem for Palestinians, but the Israelis also have a security problem,” Blair said.

Moscow is expected to host a conference later in the year aimed at finding a compromise between the rival Palestinian factions, although no date has yet been fixed for the meeting.

The mediators also hope tensions can be decreased by economic development. They're urging Arab states to come good on the financial aid they’ve already promised to the Palestinians.