JERUSALEM, (AP) – At the outset of Secretary of State Condoleezza Rice’s latest diplomatic mission to the region, Israel’s top negotiator acknowledged on Sunday that there were problems trying to frame a blueprint for a peace deal with the Palestinians.

The two sides are at odds over whether the blueprint should spell out ways to resolve issues that have derailed peace talks in the past — namely, final borders between Israel and a future Palestinian state, sovereignty over disputed Jerusalem, and a solution for Palestinians who became refugees after Israel’s creation in 1948.

Israeli and Palestinian teams have been meeting in hopes of reaching the outlines of a future peace agreement, which they hope to present at a U.S.-hosted Mideast conference expected later this year.

The Palestinians are pushing for a detailed agreement, while Israel wants a more vague document that would give it flexibility. The Palestinians also want a deadline for establishing a Palestinian state, even though earlier deadlines have been set and ignored.

“There is no tension in the meetings, there is a good atmosphere, in fact, but yes, there are problems,” Foreign Minister Tzipi Livni, Israel’s lead negotiator, said before meeting with Rice, who is trying to narrow gaps ahead of the peace conference.

Livni didn’t elaborate. But her acknowledgment of problems was a departure from Israel’s past refusals to publicly discuss disputes with the Palestinians as they try to cobble together the joint platform.

The Palestinians, by contrast, have openly discussed their dissatisfaction with Israel’s desire for vagueness and its objection to drafting a timeline for an accord.

An outline for a peace deal is supposed to be the centerpiece of the international conference that President Bush hopes will include major Arab states, including some that do not recognize Israel. The initial, outline agreement would provide a springboard for full-fledged negotiations on producing a Palestinian state.

Rice said little about her agenda for two days of closed-door sessions with Israeli and Palestinian leaders, although she had said beforehand that she did not expect to produce a written version of the outline on this trip.

Israel and the Palestinians have not announced progress on drafting a blueprint since Rice last visited the area three weeks ago. Her current trip is her eighth this year.

The fact that no date for the conference has been set reflects the broad divide.

The meeting, which Bush announced over the summer, is expected to take place in late November or December in Annapolis, Maryland.

Israel and the United States are bargaining only with the moderate government of Palestinian President Mahmoud Abbas in the West Bank, freezing out Islamic Hamas militants who seized control of the Gaza Strip in June.

“There is a willingness to do this, even though the situation on the ground, especially in Gaza Strip, is complicated,” Livni said.

The seaside strip is the smaller of two Palestinian territories that together would make up an eventual Palestinian state. But the U.S. and Israeli focus now is on making the West Bank a working model of what that state could look like.

“They’re working on some knotty issues,” Rice told reporters Saturday on her way to Israel. “I want to help make sure they’re working in a straight line ahead.”

She was also meeting Sunday with Prime Minister Ehud Olmert and Defense Minister Ehud Barak, and with former British Prime Minister Tony Blair. Blair is now an international envoy working to improve Palestinian government institutions.

On Monday she has meetings scheduled with Abbas, Palestinian Prime Minister Salam Fayyad and chief negotiator Ahmed Qureia.

On Saturday, Fayyad told The Associated Press that Palestinians won’t regard U.S.-led Middle East peace efforts as credible unless a deadline is set for a deal.

Israel has rejected a timeline, and the U.S. has been cool to the idea.

Fayyad said he was not issuing an ultimatum, but warned the situation on the ground is not static. With continued Israeli settlement expansion in the West Bank, prospects for a two-state solution were getting dimmer every day, he said.