JERUSALEM — Peace talks between Israel and the Palestinians shifted to home turf here on Wednesday, amid a rain of mortar shells on southern Israel and with no sign that the two sides had broken an impasse over Israel’s moratorium on the construction of Jewish settlements.

In a gesture to the Israelis, the president of the Palestinian Authority, Mahmoud Abbas, traveled to Jerusalem for a two-hour meeting with Prime Minister Benjamin Netanyahu of Israel at his official residence, and Mr. Netanyahu returned the favor by welcoming him with a Palestinian flag.

But the diplomatic politesse did not disguise the stubborn lack of agreement over Israel’s settlement policy on the West Bank, or the rising threat from militant groups determined to scuttle the fledgling peace initiative.

The Israeli military said one rocket and nine mortar shells were fired into Israel from Gaza on Wednesday — the heaviest day of fire since March 2009. The Israelis retaliated with an airstrike that killed a Palestinian civilian and wounded two.

The violence in Gaza, which is controlled by Hamas, the Islamic group opposed to the peace talks, did not deter the negotiators, who stuck to their schedules. Secretary of State Hillary Rodham Clinton was a busy presence, too, meeting with an array of Israeli and Palestinian officials and sitting in on the session between Mr. Netanyahu and Mr. Abbas.

Still, the issue of what to do about settlements loomed over the day. Mr. Netanyahu has rejected calls, including from President Obama, to extend the partial moratorium when it expires Sept. 26; Mr. Abbas has said the Palestinians will walk away from the table if it is not extended. A senior Israeli official said there was “very little wiggle room” on either side.

But Mr. Obama’s special envoy to the region, George J. Mitchell, said in a news conference, “We continue in our efforts to make progress in that regard, and believe that we are doing so.”

Mr. Mitchell would not say whether he was confident that the Palestinians would stay in the talks. He said only that Mr. Abbas and Mr. Netanyahu had moved very swiftly to the most divisive and politically sensitive issues, which he and Mrs. Clinton viewed as an indicator of their sincerity.

“I do not want to suggest or imply that discussing issues seriously is the same as agreeing on a resolution to them,” he said.

Friction along the Israel-Gaza border has been mounting since Sunday, when three Palestinians, including a man in his 90s and his teenage grandson, were killed in northern Gaza by Israeli mortar fire.

Wednesday’s airstrike was on a tunnel that the Israeli military said was operated by Hamas and “used to smuggle terrorists” into Gaza. Witnesses said the man who was killed was working in the tunnel.

The Popular Resistance Committees, a small group closely allied with Hamas, claimed responsibility for some of the rocket and mortar attacks, saying that they were responding to “continued Israeli violations.”

In another sign of escalation, the Israeli police bomb-disposal experts found that two of the mortar shells fired from Gaza on Wednesday contained white phosphorus, according to a police spokesman. Phosphorus munitions are typically employed to illuminate and mark battlefield areas and create smoke screens; they are highly flammable and can burn flesh like napalm.

Mr. Netanyahu and Mr. Abbas have insisted that violence will not derail the negotiations. But the latest rocket attack, which the Israeli military said used a longer-range, foreign-made projectile, will add to Mr. Netanyahu’s argument that any peace deal must take into account technological advances that have made more Israeli cities vulnerable to such attacks.

As the Obama administration tries to keep these talks afloat, it is seeking to open another channel between Israel and Syria. Mr. Mitchell, who will travel to Damascus on Thursday to meet with President Bashar al-Assad, said Syria’s involvement could help further the Israeli-Palestinian dialogue.

“We do not believe that proceeding on both tracks is mutually exclusive,” Mr. Mitchell said. “To the contrary, we believe they can be complementary and mutually beneficial.”

The latest round of peace talks has elicited a notably lackluster response from the Israeli news media: reports of Tuesday’s negotiations in Egypt were buried in several of the major Hebrew-language papers. In its coverage on Wednesday, Israeli television dwelt mainly on Mr. Netanyahu’s decision to have a Palestinian flag in his home, saying it was hotly debated among his advisers.

Mrs. Clinton, before a morning meeting with the Israeli president, Shimon Peres, acknowledged the “skepticism that many Israelis feel.” But she said the “status quo is unsustainable,” adding, “that doesn’t mean it can’t be sustained for a year, or a decade, or two or three.”

Mr. Peres said a peace agreement would blunt the ambitions of Iran, which he said trained and financed terrorists.

In a reminder of another lingering wound, Mr. Netanyahu asked for international help to win the release of Staff Sgt. Gilad Shalit, an Israeli soldier who has been held by Hamas in Gaza since 2006.

On a difficult day, however, there were also some grace notes — not least the message that Mr. Abbas inscribed in Mr. Netanyahu’s guest book, according to the prime minister’s office.

“Today,” Mr. Abbas wrote, “I have returned to this house after a long period of absence in order to continue discussions and negotiations, and in the hope of achieving eternal peace in all the region, and especially between the Israeli people and the Palestinian people.”