RAMALLAH, West Bank - U.S. Secretary of State Condoleezza Rice said Sunday that a year-end goal for an Israeli-Palestinian peace deal is still achievable, even though both sides question whether the target is realistic.

Rice made the comments after a meeting with Palestinian President Mahmoud Abbas, who has sounded increasingly pessimistic about reaching an agreement with the Israelis. Abbas accuses Israel of undermining talks by continuing to build Jewish settlements on lands the Palestinians claim for a future state, and refusing to remove hundreds of military checkpoints that dot the West Bank.

At a news conference with the Palestinian leader, Rice urged Israel not to prejudice a final deal -- a reference to the settlement construction. And in unusually pointed criticism, Rice suggested the Israeli government could do more to improve life for West Bank residents.

She said Israeli gestures in the West Bank must have a "real effect" on the lives of people there. "We are trying to look not just at quantity, but also quality of improvements," she said.

Abbas and Israeli Prime Minister Ehud Olmert relaunched peace talks at a U.S.-hosted conference last November and set a December 2008 target for a peace deal.

Their talks are to be based on the U.S.-backed "road map," a peace plan that sets out a phased process leading to the formation of an independent Palestinian state. As interim measures, Israel is supposed to halt settlement activity and take steps to improve the freedom of movement for Palestinians, while the Palestinians are supposed to dismantle militant groups. Neither side has fully met these obligations.

Rice said carrying out the roadmap is "very painstaking work," but noted that President Bush believes "the time has come for the establishment of the Palestinian state."

"That is why we are working so hard on the roadmap simultaneously with the negotiations. And we continue to believe that it is an achievable goal to have an agreement between the Palestinians and the Israelis by the end of the year and by the end of President Bush's term," she said.

Rice arrived on her latest peace mission on Saturday night, and spent Sunday in a series of meetings with Israeli and Palestinian leaders. With no concrete signs of progress, Rice is seeking to breathe new life into peace talks before a visit to the region later this month by Bush, who is joining Israel's 60th anniversary celebrations.

Rice said that during talks with Israeli Defense Minister Ehud Barak, there was an "extensive discussion" of the checkpoints.

Israel maintains hundreds of roadblocks and checkpoints throughout the West Bank, saying they are needed to protect settlements and prevent would-be attackers from crossing into Israel. The Palestinians claim the travel restrictions have stifled their economy and made free movement in an area they claim for their independent state extremely difficult.

"It was the first time that I had raised this issue, and so it will be now a discussion as to how to carry out that concern, or how to address that concern," Rice said.

At the same time, she acknowledged there is a "real security dimension" for the Israelis. She praised the Palestinians for their move over the weekend to deploy hundreds of security forces in the West Bank town of Jenin -- a onetime stronghold of militant groups.

Palestinian Prime Minister Salam Fayyad toured Jenin on Sunday, meeting with Palestinian police who had deployed there a day earlier. Fayyad said that during a joint meeting with Rice and Barak, they discussed the future deployments of Palestinian police in other West Bank areas.

After a White House meeting last month, Abbas was critical of the U.S. for not pushing Israel harder to create conditions that he thinks are more conducive to peacemaking. But on Sunday, he praised the U.S. involvement and said failure is not an option.

"We want to achieve success, and we need to reach a comprehensive agreement," he said. "If we don't reach an agreement, we have to think about what the next step will be. Now, let's not think about failure."

Later Sunday, Rice was to meet the chief negotiators, Israeli Foreign Minister Tzipi Livni and former Palestinian Prime Minister Ahmed Qureia.

Despite Rice's optimistic comments, the sides face new obstacles unrelated to the substance of peacemaking. Abbas, 73, underwent an unannounced heart test last week, raising new questions about his health, while Olmert has become the subject of a new police investigation, the fifth since he took office two years ago.

A gag order has been imposed on the Olmert case. But speaking to his Cabinet on Sunday, Olmert said the case has unleashed a wave of "malicious and wicked" rumors and pledged to push forward with his agenda.

He also confirmed reports that he would meet with Abbas on Monday. The two leaders meet regularly to assess progress.

Perhaps the biggest obstacle to a peace deal is the Hamas militant group's continued control of the Gaza Strip. The Islamic group violently overtook the area last June from Abbas' forces, leaving the Palestinians with two rival governments.

The Palestinians want to build an independent state in the West Bank and Gaza -- which lie on opposite sides of Israel. But Olmert says that even if a peace agreement is reached, Israel cannot carry it out until Abbas regains control of Gaza. Israel considers Hamas a terrorist group because of its history of suicide bombings and commitment to Israel's destruction.