The Middle East peace conference the Bush administration is planning to convene in Annapolis , Maryland , in November, may be postponed or even cancelled  altogether due to Israel’s  refusal to deal seriously with the core issues of the Arab-Israeli conflict, Palestinian sources said Thursday.

The sources pointed out that Israel was refusing to undertake to withdraw to the borders of the 4th of June, 1967,  especially in the Jerusalem region and was  also adamantly refusing to allow the repatriation of significant numbers of Palestinian refugees, uprooted from their homes and towns, in 1948.

The new pessimistic assessment of the American-led peace efforts comes as US Secretary of State Condoleezza Rice wrapped up a four-day  unsuccessful visit to the region during which she reportedly sought to convince Israel and the PA leadership to show “flexibility and responsibility” to ensure the success of  the upcoming  Annapolis conference.

However,  what Rice has found out was  that both Israel and the PA leadership were still as divided as ever on the main sticking issues, including the refugees and their rights to repatriation and indemnification, the status of occupied Arab East Jerusalem and the borders of a prospective Palestinian  state on the West Bank .

Rice held several meeting with Israeli and Palestinian leaders. However, as Israel refused to commit itself to a timetable for the implementation of  a possible agreement,  PA Chairman Mahmoud Abbas threatened to  boycott the conference, saying that “we will not go to Annapolis at any price.”

“It is impossible to go to the conference at any price. We told Secretary Rice we don’t have much time, that we must make use of every minute….These actions are hindering the endeavor to reach a document with substance, to go to the conference,” said Abbas referring to recent Israeli army incursions in Palestinian towns and recent Israeli decisions to resume excavations near the Alaqsa mosque compound.

PA frustration became even more apparent after the second meeting Rice had with Abbas in Ramallah on Wednesday during which she reportedly asked the Palestinian leader to “show flexibility” on the core issues and to “take into account” the internal political problems facing Israeli Prime Minister Ehud Olmert.

Abbas reportedly refused the request, saying, in an exasperated tone, that “why is it that the Palestinians are supposed to always accommodate Israeli problems. Don’t we have problems of our own, don’t you know that there are some Palestinians who call me names because I want to reach peace with Israel?”

Following the meeting, a clearly exasperated Abbas refused to hold a joint conference with Rice. He told reporters that “we can’t waste more time, we can’t go to the conference at any price. This is unacceptable.”

One Palestinian official was quoted as describing Rice’s latest visit as “a complete failure,” saying that she failed to persuade Israel to change its intransigent position on practically all outstanding issues.

“I doubt if we will go to the conference. The Americans and Israelis are not serious. We don’t want to make fools out of ourselves,” the unnamed official was quoted as saying.

Abbas’s own spokesman, Nabil Abu Rudeina, also sounded pessimistic, saying that “the gap between the two parties remains very wide.”

“The President made it clear to Rice that it was difficult to trust Israel and that Israel must halt its policy of assassinations, incursions, settlement construction.”

Abu Rudeina accused   Israel of stone-walling and playing for time, saying that “unfortunately, Israel’s refusal to commit itself to a timetable is hindering progress. Israel is not serious about reaching a deal or making the conference succeed.”

Earlier, Rice voiced her own frustration at the slow-pace of progress in the Israeli-Palestinian talks, saying it was up to the two sides to make the Annapolis conference succeed.

And when one reporter, asked her if she thought the upcoming conference might be postponed, Rice said “how could we speak of postponement when a date for convening the conference has not been designated.”

However, Rice desperately tried to give “the process” the benefit of the doubt, saying that the “sides were only beginning the process of negotiations,” adding that she was optimistic about success.

“We are showing the parties that there is a basis for moving forward. It is a stop in a process aimed at achieving a Palestinian state living in peace alongside Israel.”

Rice’s remarks, especially her refusal to confront Israel on the core issues of the Palestinian Israeli conflict, are being interpreted by Palestinians, and throughout the Arab world as well, as indicative of an American propensity to either postpone the conference or even cancel it altogether.

Meanwhile, President Bush has given another sign that the US is not going to pressurize Israel to end its occupation of Palestinian territories.

While reiterating the same platitudes about  his vision  of  seeing  a Palestinian state alongside Israel , Bush said the US could only play the role of a facilitator in the conflict.

“In the end, it was up to the Israelis and Palestinians to reach common ground, and that the US could only play the role of facilitator. The US can’t impose peace.”

For their part, Israeli leaders and officials continue to indulge in prevarication and equivocation with regard to Annapolis conference, prompting  the PA Minister of Information Riyad al Maliki to accuse the Olmert government of “actively seeking to abort the Annapolis conference but without bearing any responsibility for that.”

Israeli Foreign Minister Tzipi Livni, following her second meeting with Rice on Wednesday, spoke only in terms of “what is possible” and “what is realistic,” cautioning against high expectations.

“The idea is not to raise expectations that can lead to frustration and to violence, because we need to learn from past experience.”

Israel views the Palestinian territories it seized in 1967 as “disputed” rather than “occupied” as the rest of the world sees them.

Meanwhile, Hamas has called on Chairman Abbas  “ not to allow Israel and the US to insult the Palestinian people through this humiliating game of make believe.”

“Abbas should understand that Palestinian rights are not a matter for bargaining in a public auction,” said Yahya Mousa, a Gaza parliamentarian affiliated with the Hamas parliamentary bloc.

Mousa urged Abbas to rebuild the Palestinian House and put it in order and stop harrowing after the Israeli-American mirage.