Skeptics abound

Despite the settlement question, the secretary expressed optimism at the overall tone and direction of the talks, which she said were constructive.

"I have to say it's been impressive to see the two leaders engaged so seriously, so early, on what are the core issues," she said, although she declined to discuss what exactly was being discussed.

Critics, however, have voiced doubts over whether the Obama administration can shepherd the two sides to a peace deal within the span of one year, as the conflict has been ongoing for generations and peace has been tried by a number of prior U.S. administrations.

Skeptics have billed the one-year deadline as too ambitious; noted the rift in the Palestinian leadership; and argued that the two sides are only in talks to please Washington and not committed to the process.

Other critics have argued that Second Intifada of 2001-2003 - a period of intense Israeli-Palestinian violence -- killed not only thousands on both sides but also caused many to cast a doubtful eye on the possibility of peace.

And perhaps the most immediate threat to the process of all is the looming expiration date to the moratorium on the building of new Israeli settlements, some analysts said.

Reasons for optimism

Still, some are optimistic about the talks.

Martin S. Indyk, vice president and director of Foreign Policy at the Brookings Institution, wrote in a recent New York Times article that the current negotiating environment is more conducive to peace than at any point in the last decade.

The violence that plagued the region in the 1990s is has significantly diminished and the Palestinian National Authority is policing the West Bank to thwart attacks on Israelis and prove that it is reliable as a negotiating partner, he argued.

The number of Israeli citizens killed in Palestinian militants' attacks has plunged from more than 400 in 2002 to six last year and two so far this year, he noted, adding that Israeli settlement building has slowed because of the moratorium.

While Netanyahu has refused to extend the moratorium, the two sides could strike a compromise if the Israeli prime minister restricts building to modest growth in the areas that will probably be absorbed into Israel after an agreement is made, Indyk argued.

Israel could also vow to prevent its army from entering areas under Palestinian control and allow the Palestinian police to patrol in most West Bank villages, he contended.

The public on both sides, and a majority of Arabs, also support a two-state solution, he said.