Israeli Prime Minister Ehud Olmert has said he has reached "understandings and points of agreement" with Palestinian leader Mahmoud Abbas.
He gave no details of what the understandings or agreements were.
Mr Olmert made his remarks on the eve of a visit to Israel by US President George W Bush.
They also come as Mr Olmert faces a corruption investigation over allegations that he accepted bribes from an American Jewish businessman.
Mr Olmert has said he accepted campaign finance from the businessman, Morris Talansky, but has denied doing anything illegal.
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'Significant progress'
In a speech at a conference that will host Mr Bush later in the week, Mr Olmert said Israeli talks with Mr Abbas' Palestinian Authority had been "serious and significant".
"There has been significant progress, and understandings and points of agreement have been reached in important matters, but not on all the issues," he said.
Talks between Mr Olmert and Mr Abbas were launched after a peace conference at Annapolis in November.
Palestinian officials have said there have been no agreements on core issues.
Mr Bush is visiting Israel to take part in celebrations for the country's 60th anniversary and to try to push forward the peace negotiations.
In a BBC interview ahead of his trip the US president said the status quo between the Israelis and Palestinians was unacceptable.
He said he would urge the two sides to reach an agreement on the "description" of a Palestinian state with defined borders by the end of the year.
In his speech, Mr Olmert said defining Israel's permanent borders would be the "biggest and most important challenge before the state of Israel, which will determine its future".
(BBC)
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