Israel moved closer Monday to a bruising election campaign that will decide the future of peace talks, as polls showed the moderate foreign minister, Tzipi Livni, in a surprisingly close race with hard-line opposition leader Benjamin Netanyahu.

Neither of Israel's two leading political parties would have enough seats to form a government on its own, according to the surveys, which also showed an even split between the country's hawkish and center-left blocs. That signals more deadlock in peacemaking with Syria and the Palestinians.

Palestinian Prime Minister Salam Fayyad expressed concern Monday that precious time was running out, ''although I still have hope that we can find a solution through negotiation.''

Israeli-Palestinian peace talks were relaunched nearly a year ago at a U.S.-hosted summit, where Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas set a December 2008 target for clinching a final accord. But both leaders have since acknowledged there will be no deal by year's end.

President Shimon Peres began the countdown to new elections at the opening of the winter session of parliament, a day after Livni gave up on her attempts to form a new governing coalition.

''In the coming days, Israel will enter a decisive political campaign,'' Peres told lawmakers.

Peres said elections were inevitable after consulting with the country's other political parties and concluding that no one had the support to form a government. Parliament now has three weeks to dissolve itself. The vote, Israel's third in six years, would take place three months later.

Olmert, who is being forced from office by a series of corruption investigations, said he would remain in office as a caretaker in the meantime.

Israel's ceremonial president is meant to be a unifying figure in this divided country, and Peres used the occasion to appeal to the parties to work together. ''The coming elections can raise Israel up and release it from its various weaknesses,'' he said.

But almost immediately, the signs of division were evident.

Speaking to the same session, Netanyahu unofficially launched his campaign by staking out hardline positions on peace talks with Syria and the Palestinians.

He said that if elected, Israel would keep ''defensible borders,'' and he pledged to retain the Golan Heights. That refusal would make an Israel-Syria agreement impossible. Israel captured the Golan, a strategic plateau overlooking northern Israel, in the 1967 Mideast war.

Netanyahu also said Israel would have to keep large swaths of the West Bank as part of any agreement with the Palestinians, and that all of Jerusalem will remain in Israel's hands.

''We will not negotiate over Jerusalem, the capital of the Jewish people for the past 3,000 years. I didn't do it in the past and I won't do it in the future,'' said Netanyahu, who was prime minister in the late 1990s.

The speech prompted repeated heckling by dovish and Arab lawmakers.

Speaking to retired Israeli security officials in Tel Aviv, Ahmed Qureia, the Palestinians' chief peace negotiator, said opposition leaders adopt a different tone than politicians in power.

''But I want to say one thing: There will be no peace without Jerusalem,'' he said.

Netanyahu also said no Palestinian refugees would be allowed into Israel under any deal.

The Palestinians want all of the West Bank as part of an independent state, with east Jerusalem as their capital. Israel captured both areas in the 1967 war. They also say Palestinians who were made refugees following Israel's establishment, and their descendants, should be allowed to return to lost properties.

Livni, who has been Israel's chief peace negotiator with the Palestinians over the past year, says Israel must find a settlement to all outstanding issues, including borders, Jerusalem and the refugees.

Netanyahu's Likud Party had a poor showing in the last elections and holds only 12 of parliament's 120 seats. The new polls show the Likud more than doubling its strength, while Livni's Kadima holds steady.

A poll by the Dahaf Research Institute showed Livni's Kadima Party winning 29, the same number it has now, and Netanyahu's Likud taking 26 if elections were held today. A TNS Teleseker survey gave Kadima 31 seats to Likud's 29.

The Dahaf poll of 500 people had a margin of error of 4.5 percentage points. The TNS survey of more than 900 people put the maximum margin of error at two parliamentary seats.

Livni took the helm of the Kadima Party last month in a primary election forced by multiple corruption allegations against Olmert. She tried to avoid elections by keeping the current government intact, but one partner, the 12-seat ultra-Orthodox Shas Party, pressed new demands she said she could not accept.

The poll results indicated that Israelis were not punishing Livni for failing to form a coalition and supportive of her refusal to cave in to what she called political blackmail.