SHARM E-SHEIKH – The second round of direct Israel-Palestinian talks ended in this Egyptian resort Tuesday without any visible movement on the contentious settlement construction moratorium issue, but with US envoy George Mitchell saying the sides were still determined to reach a framework peace agreement within a year.

Toward that end, Palestinian Authority President Mahmoud Abbas, who spent dozens of hours negotiating in the prime minister's official Jerusalem residence on Rehov Balfour when Ehud Olmert was premier, will return there Wednesday for the first time in over two years and continue his talks with Prime Minister Binyamin Netanyahu.

Analysis: Sides speak more with US than with each other
Analysis: PA knows must keep talking even if freeze ends
Opinion: 2 Sept. deadlines, 1 hope strategy
Analysis: The PA's mixed messages about peace talks

It was not clear Tuesday evening, however, whether Wednesday’s meeting between Netanyahu and Abbas would be private, or would include US Secretary of State Hillary Clinton. Clinton was in the room each of the three times Netanyahu and Abbas met in Sharm on Tuesday.

Those discussions began inauspiciously, with senior Israeli government officials en route to the meetings expressing thinly veiled annoyance at the Palestinians’ continual threats to bolt the talks over the settlement moratorium issue.

But they ended on an upbeat note when an additional, unplanned meeting was added at the end of the day between Netanyahu and his chief negotiator Yitzhak Molcho, Abbas and his chief negotiator Saeb Erekat, and Clinton and Mitchell.

Israeli officials said that last meeting was “substantive,” and meant to lay the groundwork for meetings of the negotiating teams, which are expected to meet in the coming days to prepare for another round of meetings by the leaders, likely in some two weeks’ time.

Mitchell, at a press conference in Sharm, said in slightly upbeat tones that the sides have begun to tackle the “core issues” in a serious and extensive manner, though he declined to define which ones were being addressed.

Neither Netanyahu, Abbas nor their aides made any statements after Tuesday’s meeting. Mitchell said that the sides agreed that in order for the talks to succeed, they would have to be kept “strictly confidential.”

Israeli officials expressed satisfaction that this time, unlike the talks in Washington earlier in the month, the discussions ended without the Palestinians leaking information or making statements.

One of the issues that Netanyahu and Abbas still need to defuse has to do with whether the settlement construction moratorium, which ends on September 26, will be extended.

Although Mitchell reiterated the US position that Washington thinks the freeze should be extended, “especially given that the talks are moving in a constructive direction,” Israeli officials gave no indications of Netanyahu’s plans.

Mitchell gave no sign that the US accepts an idea Netanyahu has articulated in recent days regarding going back to the level of building in the territories that existed when Olmert was prime minister and negotiations were ongoing.

“Our position on settlements is well known and remains unchanged. This administration’s policy is the same as the policy of previous administrations, Democratic and Republican,” he said. “As President Obama said just recently, we think it makes sense to extend the moratorium.”

Looking for ways out of this dilemma, the US reportedly asked Netanyahu to either extend the freeze or give some other proof of his seriousness, such as committing to finalizing the border issue within three months.

Netanyahu reportedly balked at this idea, while the Palestinians accepted it.

Israel’s position is that the issue of borders cannot be dealt with until security issues are finalized, since the final border will be dependent on what kind of security arrangements are instituted.

In the same breath that Mitchell called for an extension of the moratorium, he also – as Obama did in comments last Friday – said the US was aware that this is a “politically sensitive” issue, and called on Abbas to “take steps that help and facilitate this process.”

But while Mitchell was explicit that the US thought the moratorium should be extended, he was less so regarding the US position on whether the PA needed to recognize Israel as a Jewish state.

“We have said many times that our vision is for a twostate solution that includes a Jewish, democratic State of Israel living side by side in peace and security with a viable, independent, sovereign, and contiguous state of Palestine,” he said.

“But of course, this is one of many sensitive issues that the parties will need to resolve themselves, and that is the point of negotiations.

The parties will reach agreement on all major issues.”

Neither Mitchell nor Clinton, when asked about this matter on her way to Sharm, would say what steps the US was looking for from the Palestinians.

In addition to meeting Netanyahu and Abbas in Jerusalem on Wednesday, Clinton is also scheduled to meet Foreign Minister Avigdor Lieberman, who has articulated opposition to the current process, and Defense Minister Ehud Barak.