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Israeli, Palestinian leaders agree to peace t -

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TONY JONES: The leaders of Israel and Palestine have agreed to an ambitious timetable in a bid to
reach a comprehensive peace deal for the Middle East.

At the behest of the US President George W Bush, Ehud Olmert and Mahmoud Abbas will try to
concluded a settlement on all outstanding issues before President Bush leaves office at the
beginning of 2009.

The breakthrough came during talks in the US city of Annapolis.

North America correspondent Mark Simkin reports.

MARK SIMKIN: The security was stifling and emotions were high. Hundreds of protesters converged on
Annapolis, a very public manifestation for the divisions that ended earlier attempts at peace.

This time, the participants hope it will be different. More than 40 countries attended the
conference including key Arab nations.

For most of his presidency, George W Bush resisted getting personally involved in the peace
process. Now he is in the middle of it.

GEORGE BUSH, US PRESIDENT: We need to lay the foundation for the establishment of a new nation, a
democratic Palestinian state that will live side-by-side with Israel in peace and security.

MARK SIMKIN: After intense last minute haggling, the Israelis and Palestinians agreed on a
framework and timetable for negotiations. They want to finalise a peace treaty by the end of next

At this stage, it's just an agreement to seek agreement and key issues such as the borders of a
Palestinian state and the future of Jerusalem are yet to be addressed.

EHUD OLMERT ISRAELI PRIME MINISTER (TRANSLATION): We want peace. We demand an end to terror, an end
to incitement and to hatred. We are prepared to make a painful compromise rife with risks in order
to realise these aspirations.

MAHMOUD ABBAS, PALESTINIAN PRESIDENT (TRANSLATION): Time has come for the cycle of blood, violence
and occupation to come to an end. Time has come that both of us should look at the future with
confidence and hope and that this long-suffering land which was called the land of love and peace
would not be worthy of its own name.

MARK SIMKIN: Any peace deal could still be sabotaged. On the West Bank, thousands of Palestinians
denounced the conference and the Palestinian leadership.

Police loyal to President Abbas shot and killed one of the protesters. There were further
demonstrations in Hamas controlled Gaza, underlining just how difficult it will be to get agreement
on issues like the borders of a Palestinian state.

GEORGE BUSH: The task begun here in Annapolis will be difficult. Yet the parties can approach this
work with confidence. The time is right. The cause is just. And with hard effort, I know they can

MARK SIMKIN: No one really expected a day of talks could end decades of violence and the diplomats
here agree it's what happens after Annapolis that is really important. There will be further
top-level talks at the White House tomorrow and the formal negotiations will begin in mid-December.

Mark Simkin, Lateline.