Kerry leaves Middle East without deal, but says gap has been narrowed

US Secretary of State John Kerry ended a shuttle diplomacy mission on Sunday without an agreement on resuming Israeli-Palestinian peace talks but said gaps had been narrowed and he would return to the region soon.

"I'm pleased to tell you that we have made real progress on this trip. And I believe that with a little more work, the start of final status negotiations could be within reach," he told a news conference before his departure from Tel Aviv's airport.

"We started out with very wide gaps and we have narrowed those considerably," he said, without elaborating. "We are making progress. That's what's important and that's what will bring me back here."

Over four busy days, Kerry met Israeli and Palestinian leaders repeatedly and separately to try to find a formula for reviving direct negotiations stalled since late 2010 in a dispute over Jewish settlements in the occupied West Bank.

Kerry said both Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas had asked him "to return to the area soon". "(That is) a sign that they share my cautious optimism," he added.

Palestinian chief negotiator Saeb Erekat said there had been some progress, "but we can't say there's been a breakthrough".

Erekat said he would hold further meetings with US representatives to follow up on some issues raised during the Kerry visit, the secretary's fifth since taking office.

Netanyahu has repeatedly called on Abbas to return to negotiations. But he has balked at Abbas's demand thatIsrael first halt settlement expansion in the West Bank and East Jerusalem, areas it captured in a 1967 Middle East war and which Palestinians want for a future state.

An Israeli official, who asked not to be identified, said Abbas was also seeking the release by Israel of scores of long-serving Palestinian security prisoners as a goodwill gesture.

But Netanyahu believed the issue should be addressed only after talks resume, the official added.

NO PRECONDITIONS

"Israel is prepared to enter into negotiations without delay, without preconditions, and we are not placing any barriers on the resumption of final-status talks on a permanent peace agreement between the Palestinians and us," Netanyahu told his cabinet after six hours of overnight talks with Kerry.

For new talks to be held, Abbas has said Netanyahu must also recognise the West Bank's boundary before its capture by Israel as the basis for the border of a future Palestinian state.

Israel, seeking to keep major settlements under any peace accord, has rejected those terms, deeming them preconditions, and has said its security forces would not be able to defend the pre-1967 frontiers.

A US State Department official said Kerry's discussions with Netanyahu and advisers in a Jerusalem hotel suite ended shortly before 4 a.m. (0100 GMT) on Sunday.

Afterwards, Kerry strolled through the deserted streets of the city accompanied by his security and one of his advisers on the Middle East, Frank Lowenstein. He then drove to Ramallah, the Palestinian hub city in the West Bank, to see Abbas.

Kerry is keen to get fresh peacemaking under way before the United Nations General Assembly, which has granted de facto recognition to a Palestinian state, convenes in September.

Netanyahu is concerned that the Palestinians, in the absence of direct peace talks, could make further moves at the U.N. session to get their statehood recognised, circumventing Israel.

But Kerry said the pace of his diplomacy was set by the two sides, whom he described as sincere about finding a way forward.

"We're not going to get stuck with artificial deadlines. That's a big mistake," he said before flying to Asia.

(Additional reporting by Ali Sawafta in Ramallah, Writing by Jeffrey Heller and Dan Williams