By Anshel Pfeffer, Haaretz Correspondent, Haaretz Service and Reuters

Prime Minister Ehud Olmert said on Tuesday that he and Palestinian President Mahmoud Abbas have reached "understandings and points of agreement" on key issues in U.S-backed peace talks but he gave no details.
"There has been significant progress, and understandings and points of agreement have been reached in important matters, but not on all the issues," Olmert said in a speech to visiting world leaders at the "Facing Tomorrow" presidential conference.
"The discussions we are holding with the Palestinian Authority are very serious and meaningful," he said.
Olmert also stated that, "the greatest challenge now before us in the State of Israel, according to which its future will be determined, is the challenge of setting the final borders of the state within the framework of a peace accord with its neighbor, which will be recognized by the entire international community."
The prime minister is currently embroiled in a new investigation into allegations of corruption , as a result of which senior Palestinian officials have cast doubt over his ability to reach a peace deal with the PA.
Palestinian officials said Tuesday that there are no such understandings. "We have had serious and in-depth negotiations with the Israeli side," said negotiator Saeb Erekat, "but gaps still exist in all issues. We hope to be able to break these gaps before the end of 2008."
In the address, Olmert reiterated his support for a two-state solution to the Israeli-Palestinian conflict: "As long as the State of Israel's borders are not formed in line with this principle, as long as the blurring and mixing between us and the Palestinians continues - we will not realize the vision of tomorrow."
Also Tuesday, U.S. Secretary of State Condoleezza Rice said it was a misperception that not that much is going on in the political negotiations.
Her language was tempered, however. "I'm also a big believer that nothing is really impossible," she said in an interview conducted Monday and aired Tuesday on CBS' The Early Show. "It might be improbable, but it's not impossible."