The common goal of the talks is "two states for two peoples," said Mitchell, adding that the two sides have agreed to reach a final framework agreement within a year.

"That work is now well underway," he said, adding that parties agree that in order to make the negotiation a successful one, the talks must be kept strictly confidential and treated with the uttermost sensitivity.

Before the negotiations, Netanyahu rejected the Palestinian demands on settlement freeze in the West Bank in his latest statement, however, he hinted at "midway options" that would see construction resume at a slower pace. A moratorium on the building of settlements in the West Bank will expire at the end of this month.

However, the Israel and Palestinian leaders still agree to try to resolve the core issues within one year, according to the U.S. envoy.

They reiterated their condemnation of all forms of violence that target innocent civilians and pledged to work together to make them secure, said Mitchell.

Prior to the second round of talks, Egyptian President Hosni Mubarak met separately with Clinton, Netanyahu and Abbas. Clinton has also held separate meetings with Netanyahu and Abbas.
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