Israel and the Palestinians will not be able to reach a peace agreement this year, the Palestinian chief negotiator in U.S.-sponsored peace talks with the Jewish state said on Monday.

"I don't think that we will be able to reach an agreement this year," Ahmed Qurie told a group of former Israeli security officials at a conference near Tel Aviv on Israeli-Palestinian peacemaking.

Washington launched the latest peace drive at a conference in Annapolis, Maryland, last year with the hope of shepherding Israel and the Palestinians towards a peace deal before President George W. Bush leaves office in January.

But Israel's failure to halt Jewish settlement in the occupied West Bank, divisions among Palestinians and political instability in Israel have made the prospects of meeting Washington's deadline for a deal ever more elusive.

"The process is difficult and the political situation on both sides is difficult," said Qurie, a former prime minister, referring to strife between the Palestinian factions Fatah and Hamas and to a snap parliamentary election in Israel.

White House spokeswoman Dana Perino told reporters on Monday Bush remained committed to the process started at Annapolis.

"I think that what the president wants to do is continue to try to work with them. No doubt we have an uphill climb, but they have always had an uphill climb in the Middle East," Perino said.

On the Palestinian side, President Mahmoud Abbas's peace efforts have been made more difficult by Hamas's control of the Gaza Strip which it seized from forces loyal to his Fatah movement a year ago.

Egypt will try to heal the rift between the rival factions at a summit in Cairo on Nov. 5. Hamas is opposed to Abbas's peace talks with Israel but in June the Islamist group agreed to a six-month ceasefire with the Jewish state.

In Israel, political parties braced for a parliamentary election on Monday after Prime Minister-designate Tzipi Livni failed to cobble together a coalition government. She succeeded scandal-hit Ehud Olmert as Kadima party head last month.