WRAPUP 5-Bush launching new Mideast talks amid skepticism

WASHINGTON (Reuters) - U.S. President Bush invited Israeli and Palestinian leaders to the White House to renew long-stalled peace talks on Wednesday but faced deep skepticism over chances for a deal before he leaves office.

Bush was hosting Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas one day after a 44-nation conference where both pledged to try to forge a peace treaty by the end of 2008 that would create a Palestinian state.

Once wary of taking a hands-on role in Middle East diplomacy, Bush was ready to ceremonially inaugurate the first formal Israeli-Palestinian peace negotiations in seven years.

His aim is to achieve in his final 14 months in office what has eluded U.S. administrations for decades.

But there was no sign of Bush's commitment to the kind of sustained personal engagement he disdained after Bill Clinton failed to broker a peace accord in the twilight of his presidency.

All three leaders are politically weak at home, raising doubts whether they can make good on their promises, and lingering mistrust between Israel and Palestinians will make any progress difficult.

"There's never a perfect time in the Middle East and so we have to deal with the times that we've been dealt," Secretary of State Condoleezza Rice acknowledged on NBC's "Today Show" a day after the Middle East conference in Annapolis, Maryland.

Capping a three-day diplomatic flurry, Bush first met separately with Abbas on Wednesday. He will then see Olmert before getting both leaders together for an afternoon session to declare the peace process officially revived.

In a sign of the obstacles ahead, Hamas Islamists who control the Gaza Strip rejected the new peace drive and vowed to undermine it. Violence also flared, with Israeli missiles killing two Hamas naval officers in the southern part of the coastal territory, medical workers said.

CORE ISSUES SKIRTED

Bush, who faced criticism for not doing more sooner to resolve the conflict, had opened Tuesday's conference at the U.S. Naval Academy by reading a joint statement painstakingly negotiated by the two sides but which skirted the core issues that divide them.

Bush, however, lauded Olmert and Abbas for agreeing to "good faith, bilateral negotiations," and Israel and the Palestinians committed themselves to send negotiating teams to a new session in Jerusalem on Dec. 12.

The Arab presence at the conference, including Saudi Arabia and Syria, gave a boost to Bush's highest-profile peace drive since he took office in 2001.

But another motivation for many participants was the desire to offset the growing regional influence of Iran, a U.S. foe and outspoken opponent of peace efforts with the Jewish state.

Trying to reinforce the seriousness of the U.S. commitment, the Bush administration planned to name Marine Gen. James Jones, who was NATO commander in Europe until 2006, to help monitor some aspects of the peace process, officials said.

Still, some analysts were skeptical. "There is, I think, considerable doubt remaining about whether the administration is prepared to take on the heavy lifting ... to make this work," said Bruce Riedel of the Brookings Institution.

Bush hopes for a foreign policy success to polish his legacy, but the unpopular war in Iraq, the main factor in his low public approval ratings, could limit his room to maneuver.

Olmert's public standing is also low, partly due to last year's Lebanon war, and rightist coalition partners have warned against concessions. Abbas lost control of Gaza to Hamas Islamists in June and only holds sway in the West Bank.

The Annapolis accord emerged from last-minute talks on a joint document meant to chart the course for negotiating the toughest "final status" issues of the conflict -- Jerusalem, borders, security and the fate of Palestinian refugees.

The declaration was mostly vague about the U.S. role. Rice will take the lead for the Bush administration, and the White Hosue has declined to say whether the president might travel to the region to help shepherd the process.

Beyond accepting a framework for peace talks, neither Olmert nor Abbas gave any sign of ceding ground on their main differences when they addressed the conference on Tuesday.

The Israelis appeared to have come away with a greater share of what they were seeking at Annapolis, and many commentators in the Arab world dismissed the conference as a media event designed to repair Bush's image damaged by the Iraq and Afghanistan wars. (Additional reporting by Jeffrey Heller, Adam Entous, Sue Pleming, Mohammed Assadi, Khaled Yacoub Oweis, Caren Bohan and Tabassum Zakaria in Washington, Nidal al-Mughrabi in Gaza, Reza Derakhshi in Tehran, Wafa Amr in Ramallah and Rebecca Harrison in Jerusalem; Editing by David Storey)