Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas were continuing their talks in Jerusalem on Wednesday. The two leaders had also met with U.S. Secretary of State Hillary Clinton in Sharm-el-Sheikh, Egypt on Tuesday.
Clinton told a press conference in Jerusalem on Wednesday she understood the skepticism of Israelis after so many failed attempts at peace. However, she said Netanyahu and Abbas were serious about the talks.
"I have sat with these two men individually and together," Clinton said. "I have listened to them talk candidly and forcefully. They are getting down to business and they have begun to grapple with the core issues that can only be resolved through face to face negotiations."
The toughest issue on the table is the division of the city of Jerusalem. Israel has claimed sovereignty over the city, which it reunited in the 1967 Six Day War.
Palestinians want the eastern part of the city for the capital of a future Palestinian state.
Palestinians are also threatening to quit the talks if Netanyahu doesn't extend a partial moratorium on construction in Israeli communities in Judea and Samaria - the West Bank -- set to expire on Sept. 26.
Netanyahu has indicated building will resume after that date.
For it's part, Israel wants the Palestinians to recognize Israel as a state of the Jewish people.
Expectations of an agreement between the sides are not high among Israelis or Palestinians. One analyst said the talks at this point are more with the U.S. than between the two sides.