Palestinian President Mahmoud Abbas broke off talks at the beginning of the week to protest an exceptionally deadly Israeli military assault in the Gaza Strip, where militants affiliated with the ruling Islamic Hamas movement have been barraging southern Israel with rockets.
"I have been informed by the parties that they intend to resume negotiations and are in contact with one another as to how to bring this about," Rice said at a news conference in Jerusalem following a meeting with Israeli Foreign Minister Tzipi Livni.
Abbas backed off remarks he made earlier in the day, when he said he would not resume negotiations until Israel reaches a truce in the Hamas-controlled Gaza Strip. "The peace process is a strategic choice and we have the intention of resuming the peace process,'' he said in a statement.
He did not say when talks would restart, but Rice said in Jerusalem that a U.S. general overseeing implementation of "the road map" peace plan would hold his first joint meeting with Israelis and Palestinians next week.
At a news conference alongside her Israeli counterpart, Tzipi Livni, in Jerusalem, Rice declined to call for a truce, and urged Hamas to halt its rocket fire.
In January, President Bush appointed Lt. Gen. William Fraser III to monitor both sides' compliance with the road map, a milestone-based plan that has been the basis of talks that resumed in November after a seven-year break.
Both sides, Rice said, need to carry out road map obligations to have "robust" peace negotiations. The plan's initial stage calls on Israel to stop settlement activity and obliges the Palestinians to clamp down on militants. Abbas, however, controls only the West Bank and has no influence over Gaza, which has been ruled by Hamas since a violent takeover in June.
The return to negotiations has been troubled by violence and continued Israeli construction on lands the Palestinians claim for a future state. Tensions peaked over the past week after Gaza militants extended the range of their fire closer to Israel's center, and Israel struck back with an assault that Gaza officials say killed more than 120 Palestinians, including dozens of civilians.
Confidence-building measures have been critical to the peacemaking, and Rice asserted Wednesday that "we do need to have improvements on the ground."
"The negotiations must be started, but after the truce," Abbas had said earlier in the day. "Once the truce is achieved the road will be open for negotiations."
He said Rice told him she would send an envoy to Egypt, which often mediates between Israel and Hamas. "There are real efforts being exerted by Egypt for the truce," Abbas said.
Although Abbas did not mention Hamas by name, his aides said the Islamic group must clearly be part of a deal. Hamas seized control of Gaza from Abbas' forces last year, and he wields little influence in the area.
The aides said Abbas has proposed a package in which Hamas halts its relentless rocket barrages on southern Israel if Israel ends its attacks on Palestinian militants and Egypt reopens its border with Gaza. It was not said whether the proposal would factor in to discussions with Fraser next week.
Israeli government spokesman Mark Regev declined to discuss the parameters of any possible deal but suggested Israel could be open to a cease-fire. "If they were not shooting at our civilian population, we would not have to respond," he said.
During the recent fighting, Hamas fired rockets deeper into Israel than ever before. Israeli officials fear that Hamas will use the lull of a cease-fire to rearm.
Rice met earlier Wednesday with Palestinian peace negotiators, hoping to persuade them to resume talks. CBS News correspondent Robert Berger reports it was the last of a two-day "rescue mission" by Rice, who seemed set to return to Washington having won no solid concessions from either side.
A day earlier, Palestinian President Mahmoud Abbas pointedly resisted Rice's pressure to return to the negotiating table, saying Israel had to first "halt its aggression" - a reference to the recent military operations against Gaza rocket squads.
Privately, Palestinian officials have said Abbas is open to renewing talks, but because of domestic pressures, will have to wait several days to do so. But before Rice met with Palestinian officials, on Wednesday, no such message had been delivered to her or Israeli Prime Minister Ehud Olmert, they said.
Much is expected to depend on the level of violence in Gaza in the coming days. Gaza was quiet Wednesday, and there were no reports of Palestinian rocket fire on southern Israel.
The most recent violence came Tuesday night, as about 25 Israeli armored vehicles rumbled into southern Gaza and clashed with militants. A 1-month-old, a medical official said.
The Israeli tanks fired shells and attack helicopters fired missiles during the clashes, Palestinian witnesses said.
Rice met with Olmert late Tuesday and had meetings scheduled with Israel's foreign and defense ministers Wednesday before departing for Europe.
While urging Abbas to resume the talks, she also asked the Israelis to do all they could to avoid civilian casualties in Gaza. Israel's Yediot Ahronot newspaper also said she promoted the idea of a cease-fire between Israel and Palestinian fighters affiliated with Hamas, the Islamic group that rules Gaza.
After meeting Abbas on Tuesday, Rice told a news conference that negotiations between moderate Palestinians and the Israelis are the only solution. At the same time, she defended Israel's right to seek out militants who use Gaza to launch rockets at southern Israel.
"I understand the difficulties of the current moment," she said. "We all must keep an eye on what is important."
In remarks made Tuesday,for the stalled peace talks squarely at the feet of Hamas. "Negotiations are going to have to be able to withstand the efforts of rejectionists to upset them, to create chaos and violence, so that people react by deciding not to negotiate," Rice said in Egypt at the start of her two day visit to the region.
Abbas is locked in a bitter rivalry with Hamas, which violently seized control of Gaza last June after routing his forces. Still, Abbas claims to be the leader of Gaza, and he suspended peace talks earlier this week to protest Israel's latest crackdown there. Palestinian hospital officials say more than half the dead in Gaza were civilians.
At Tuesday's news conference, Rice won no public promise that Palestinians would end their boycott soon. Abbas is not expected to relent before Rice leaves the Middle East.
"I call on the Israeli government to halt its aggression so the necessary environment can be created to make negotiations succeed, for us and for them, to reach the shores of peace in 2008," Abbas said.
He was referring to the goal - stated at a U.S.-sponsored Mideast peace conference in November - of reaching an Israeli-Palestinian peace treaty by the end of the year.
"No one can under any kind of pretext justify what the Israeli military have conducted over the past days," an angry Abbas told reporters, with Rice at his side.
The best Rice got from Abbas during their joint public appearance in Ramallah was affirmation that his government remains pledged to the peace path charted by President Bush last fall. The negotiations are supposed to yield a deal outlining an independent Palestinian state.
The violence transformed Rice's scheduled mission. Instead of trying to encourage the peace talks, she was forced to try to restore them.
The Bush administration has staked peace hopes on Abbas' West Bank government, while freezing out Hamas, which is pledged to Israel's destruction.
In Washington, Mr. Bush said he remains optimistic.
With only 10 months left in his presidency, Mr. Bush said Tuesday he still believes there is "plenty of time" to get a Mideast peace deal before his term ends.
"This is a process that always takes two steps forward and one step back," Mr. Bush said after meeting at the White House with Jordan's King Abdullah II. "We just need to make sure that it's just one step back."