"We knew ... that if that agreement was not reached by the end of the year, there would be those that would say that the Annapolis process, the negotiations, had failed. In fact, it is quite the opposite," Rice said at a news conference in the West Bank city of Ramallah with Palestinian President Mahmoud Abbas, according to Reuters. "The distance to peace has been narrowed although peace has not been achieved.
"While we may not yet be at the finish line, I am quite certain that if Palestinians and Israelis stay on the Annapolis course, they are going to cross that finish line and can do so relatively soon," she added.
The White House acknowledged for the first time Thursday that the Bush administration goal's of a deal on Palestinian statehood before Mr. Bush leaves office in January was unlikely to be achieved.
White House spokeswoman Dana Perino attributed the delay in negotiations to "the political changes that have happened in Israel over the past couple of months, and really since early summer."
A corruption scandal is forcing Israeli Prime Minister Ehud Olmert from office and his predecessor, Foreign Minister Tzipi Livni, was unable to form the political coalition necessary to avoid early elections.
"It is important that we preserve the process within the structure that we have created," said Livni, a centrist who will be running against hardline former Prime Minister Benjamin Netanyahu in the Feb. 10 voting, at a press conference with Rice Thursday in Tel Aviv.
Peace efforts have also been stymied by the split in the Palestinian territories into the West Bank where Abbas holds authority and the Gaza Strip, which is run by the Islamist Hamas movement.
In her remarks, Perino praised the good "groundwork" in place for continued talks among Israeli and Palestinian leaders.
"Over the past year, we have laid some very good groundwork for the Palestinians and the Israelis to be able to continue to have their discussions," she said. "It's important that we maintain momentum for the negotiations."
Peace accords in Annapolis, Md., a year ago set a deadline for a peace accord by the end of President Bush's term. Rice has since made eight trips to the region in efforts to achieve the goal.
"The Annapolis process ... is vital, it is vibrant, and it is continuing, and I am quite certain that carried to its conclusion, it will produce a state of Palestine," Rice said at the news conference.
Rice, who visited Jordan on Friday, will not try to push new proposals for a last-minute deal, Reuters reported.
Negotiators from the two sides were to brief top officials from the international diplomatic "Quartet" on the Middle East -- the United States, United Nations, European Union and Russia -- in Egypt on Sunday on their progress to date.
Abbas told reporters he hopes the new administration of President-elect Barack Obama, who will take office on Jan. 20, will make talks in the region a high priority.
"We hope that the new administration will begin immediately tackling the Middle East issue so we would not waste time," he said.
Rice said Thursday that it was as an "open question" of how the Bush administration would hand over the matter to Obama's team, according to Reuters.