President Barack Obama opened the first round of direct Israeli-Palestinian negotiations Wednesday in nearly two years by challenging Mideast leaders to put aside decades of antagonism and reach a peace accord within the next year.

"Do we have the wisdom and the courage to walk the path of peace?" Obama asked, standing alongside leaders of Jordan, Egypt, Israel and the Palestinians in the East Room of the White House.

Each leader pledged to work towards an agreement and expressed hope that the intensive talks that began Wednesday with a series of one-on-one meetings with Obama and continue Thursday at the State Department would eventually yield a breakthrough. The leaders made the statements to reporters and a small audience just before a working dinner at the White House.

Israeli Prime Minister Benjamin Netanyahu called Palestinian Authority President Mahmoud Abbas “my partner in peace.”

“It is up to us, with the help of our friends, to conclude the agonizing conflict between our peoples and to afford them a new beginning,” Netanyahu said to Abbas.

Abbas, in turn, said the “time has come for us to make peace.” He used his remarks to call for a permanent freeze on Israeli settlement construction in the West Bank – a major point of contention that could potentially stall the talks. “We will spare no effort and we will work diligently and tirelessly to ensure that these negotiations achieve their goals and objectives in dealing with all of the issues,” he said.

The leaders’ optimistic statements, however, were tempered by doses of realism, as they acknowledged that they faced numerous obstacles.

“There will be many challenges, both great and small,” Netanyahu said. “Let us not get bogged down by every difference between us. Let us direct our courage, our thinking and our decisions at those historic decisions that lie ahead.”

Obama said he was “hopeful – cautiously hopeful – but hopeful.” He acknowledged the high risks involved in launching a new Israeli-Palestinian peace bid when the parties still remain far apart on core issues, and the skepticism that his push for an agreement in the next year will be successful.

But, he said, he told Abbas and Netanyahu during separate meetings Wednesday that the environment was right to reach an accord and make progress toward the “two state” solution that has eluded leaders on both sides for years.

“This moment of opportunity may not soon come again,” Obama said. “They cannot afford to let it slip away. Now is the time for leaders of courage and vision to deliver the peace that their people deserve.”

Earlier Wednesday, Obama pledged to throw his administration’s “full weight” behind the peace talks, but warned that it’s up to the Israelis and Palestinians to lead the way.

“Let me be clear: Ultimately, the United States cannot impose a solution and cannot want it more than the parties themselves,” Obama said earlier Wednesday. “There are enormous risks involved here for all the parties concerned, but we cannot do it for them.”

He also chastised unnamed regional leaders “who insist it’s a top priority and yet do very little to support efforts to bring about a Palestinian state,” presumably referring to some Arab states’ past unwillingness to offer Israel confidence-building gestures. It wasn’t clear if he was referring to Saudi King Abdullah, who did not attend the talks but who, Obama phoned on Tuesday.

Earlier Wednesday, Obama appeared alongside Netanyahu and pledged that violence in the West Bank would not deter the American, Israeli and Palestinian leaders from pushing ahead with an agreement.

Obama said “extremists and rejectionists” would try to undermine the talks with attacks like the one Tuesday, in which a Palestinian gunman killed four Israelis in Hebron.

“The United States is going to be unwavering in its support of Israel's security, and we are going to push back against these kinds of terrorist activities,” Obama said at the White House after meeting privately with Netanyahu. “The message should go out to Hamas and everybody else who is taking credit for these heinous crimes that this will not stop us from not only ensuring a secure Israel, but also securing a longer-lasting peace in which people throughout the region can take a different course."

Netanyahu then stepped to the microphone, thanking Obama for the “sentiment of decent people everywhere, in the face of this savagery and brutality.”

“Four innocent people were gunned down and seven new orphans were added, by people who have no respect for human life and trample human rights into the dust and butcher everything that they oppose,” he said.

Netanyahu said Obama’s statement “is an expression of our desire to fight against this terror” and called their talks “open, productive, serious in the quest for peace, also centered around the need to have security arrangements that are able to roll back this kind of terror and other threats to Israel’s security.”

Wednesday’s summit, marking the start of the White House’s effort to turn attention from the Iraq war to the peace negotiations, come at a perilous time — a fact underscored by the West Bank shooting, and analysts doubt it will produce any sweeping developments.

“These talks aren't quite ready for prime time yet, and everyone should be slow-walking the process,” former U.S. Middle East peace negotiator Aaron David Miller said. “If they get more ambitious now, it will collapse.”

“What counts are only three things this round,” Miller said. “One, that the Israelis and Americans work out (or toward) an agreement on a moratorium on settlements; two, that Benjamin Netanyahu, even while he pushes security, shows some movement in the Palestinian direction on one other issue — borders; three, that the Palestinians hang in there and not bolt the talks because they believe they're the key to an empty room.”

At a meeting Tuesday night at the Mayflower Hotel, the Israeli delegation’s headquarters, Clinton and Netanyahu condemned the West Bank bloodshed. But Clinton said the attack shows Netanyahu is right to take on peace negotiations with a Palestinian authority that rejects Hamas’s terrorist tactics in favor of peace.

“The forces of terror and destruction cannot be allowed to continue,” Clinton said. “It is one of the reasons why the prime minister is here today: to engage in direct negotiations with those Palestinians who themselves have rejected a path of violence in favor of a path of peace.”

The White House has indicated they envision a one-year process for the negotiations to achieve the framework agreement for a final settlement of the Israeli-Palestinian conflict, an agreement that then would be implemented over several years.

Noting that it was Netanyahu who publicly said in July that he thought the parties could get an agreement within a year, Middle East peace envoy George Mitchell told journalists Tuesday that the ambitious deadline -- after 17 years of peace efforts -- suited Abbas and the administration as well.

“People ask whether the long history of negotiation has been beneficial or harmful. It’s actually been both, in some respects,” Mitchell said, saying it’s been beneficial in that people understand what the “principal issues are and how they might be resolved; harmful in the sense that it’s created” cynicism in the region about “a never-ending process, that it’s gone on for a very long time and will go on forever.”

“So it’s very important to create a sense that this has a definite concluding point,” Mitchell said. “And we believe that it can be done, and we will do everything possible, with perseverance and patience and determination, to see that it is done.”

Mitchell also said that he supports Netanyahu’s idea to meet with Abbas about every two weeks in the region going forward, after the direct talks begin, an offer that Abbas has yet to accept.

The administration has kept its cards close to the vest on the specifics for the talks and does not seem to have many details worked out -- nor an evident Plan B should talks run aground, Middle East analysts who have consulted with the administration in recent days said.

Of most immediate concern is the fact that a 10-month partial moratorium on Israeli settlement construction in the West Bank is due to expire Sept. 26. Sources said that Netanyahu adviser Dan Meridor has proposed a “compromise” under which after Sept. 26, some construction could resume in some settlement blocs that many Israelis feel would go to Israel in a final peace agreement, swapped in exchange for other land given to the Palestinians. But the administration is not satisfied with the Meridor compromise plan, sources said, in part because it is not limited to the three main blocs that have previously been discussed for such a swap.

Regarding the Meridor compromise plan, former U.S. Ambassador to Israel and Egypt Dan Kurtzer said it’s potentially important but the details are critical.

“Conceptually, it’s probably the right idea,” Kurtzer told POLITICO. “But without a very specific understanding on the details, it’s an idea that could blow up.”

Among those details, Kurtzer said: “Number one, what settlement blocs is Meridor talking about? Number 2, how extensive is the area that he wants to allow construction in those blocs? And number 3, what is he talking about with respect to Jerusalem. Is there a way to refine his ideas to Jerusalem as well. So again, it’s conceptually important, but a lot of details have to be understood.”

Kurtzer also suggested that Abbas and Netanyahu may both have an interest in delaying agreement until the settlement freeze is due to expire. “Even though there’s going to be discussion of this now, I don’t see Netanyahu making a gesture until he has to,” Kurtzer said. “Because he will want to wait until as close as possible to Sept. 25 to see what it is that Abbas is bringing to the table. And Abbas is going to wait until Sept. 26 to see if he can put pressure on Netanyahu on the settlements.”

For the Obama administration, that means it needs to stay engaged while keeping expectations modest for concrete results from the next two days of talks, Kurtzer explained. “It’s quite a handful, which means the U.S. needs to get engaged probably without an immediate expectation of success, but without engagement they won’t get the details that are needed when they are needed.”

Former U.S. Ambassador to Israel Martin Indyk argued in a piece Wednesday that narrowing and defining what settlement blocs would become part of Israel, and where Israeli settlement building outside of that would halt, would be an area of negotiation that the Obama administration could advance over the next three weeks.

"Obama should use the limited time available before the settlement moratorium actually expires at the end of this month to focus the negotiators on defining the western border of the Palestinian state," Indyk, now vice president for foreign policy studies at the Brookings Institution, wrote. "The Palestinians have already agreed in previous negotiations to the principle that some settlement blocs will be annexed to Israel as part of a land swap. If negotiators can agree on which blocs will be absorbed by Israel, settlement activity can continue there, while the moratorium is extended everywhere else."

Mitchell told journalists Tuesday that U.S. opposition to Israeli settlements had not changed.

The Obama administration has been frustrated in recent days, the sources said, that Abbas keeps publicly insisting on an absolute settlement moratorium and positions that may limit his own flexibility in the talks.

“I get a pretty strong sense of exasperation from the administration folks that Abbas keeps climbing up the tree himself,” one Middle East expert in close consultation with the administration said Tuesday. “This time, he is the one putting demands on a moratorium.”

But Palestinian trepidation is understandable with Israel holding the territory and the leverage, Indyk said.

"The Palestinians are the weak player in this negotiation," Indyk wrote. "Since Israel controls the territory—including Jerusalem—on which a deal will have to be made, it necessarily holds all the high cards. Obama has to pay close attention to Palestinian concerns. ....The only real card Abu Mazen (Abbas) wields is his ability to refuse a deal that does not serve the interests of his people. ....That means Obama needs to listen carefully and make a fair assessment of each side's minimum requirements before putting forward American bridging proposals."