Palestinian and Israeli negotiators headed into the second of 10 days scheduled for intensive talks, being held at a secret location. An Israeli Cabinet minister suggested Israel might show some flexibility on one of the most difficult issues on the agenda -- the status of Jerusalem.
Still, progress has been elusive, and both sides have said the Israeli-imposed deadline for drafting a framework agreement might be missed.
Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat were to meet Thursday to try to push the talks forward.
Saeb Erekat, a senior Palestinian negotiator, said success was up to Israel.
"There is only one key, Mr. Barak has to make the decision," Erekat said. "It is the moment of truth."
Israeli Justice Minister Yossi Beilin said he believed both sides would now have to make painful concessions. "The most difficult issue is to get to the moment of truth and say to our respective constituencies, here is what we could achieve," Beilin said.
Four tough issues are on the agenda -- borders, Jerusalem, Jewish settlements and Palestinian refugees.
The Palestinians want Israel to withdraw from all of the West Bank and Gaza Strip, as well as east Jerusalem -- land captured in the 1967 Mideast war. Israel has said it will never relinquish control over Jerusalem or withdraw to the 1967 lines.
However, Beilin indicated that Israel was ready to compromise over Jerusalem.
In informal talks with Arafat's deputy, Mahmoud Abbas, several years ago, Beilin raised the idea of expanding Jerusalem's municipal boundaries eastward into the West Bank, and then giving the Palestinians control over some of those areas, including the Jerusalem suburb of Abu Dis.
Such an arrangement could be a face-saving device, allowing the Palestinians to say they have won control over parts of Jerusalem. However, Palestinian officials have rejected the plan.
Beilin and Deputy Defense Minister Ephraim Sneh revived the expand-and-share idea this week, though it was not clear whether it was being discussed in the talks.
"The Jerusalem issue is perhaps one of the most difficult issues on our agenda," Beilin said Monday, "but also perhaps one of the easiest."
Beilin said the Palestinians could establish "the main city in their entity" in an area they could call Jerusalem, but which was currently outside Jerusalem's municipal boundaries.
The Palestinians have demanded that the Jerusalem suburbs in the West Bank, including Abu Dis, be given over to full Palestinian control as part of the next Israeli troop pullback, a move that would kill the expand-and-share proposal.
©2000 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed