Israeli and Palestinian officials have launched negotiations on core issues in an attempt to reach a final peace agreement by the end of this year.

Chief Palestinian negotiator Ahmed Quriea (file photo)

Negotiating teams led by Israeli Foreign Minister Tzipi Livni and former Palestinian prime minister Ahmed Qureia met for two hours Monday at a hotel in Jerusalem. Officials on both sides described the atmosphere as good.

An Israeli foreign ministry spokesman says the teams agreed to continue intensive discussions on the most intractable disputes of the Israeli-Palestinian conflict. These include the status of Jerusalem, Palestinian refugees and the borders of a Palestinian state.

President Bush said on a visit to Israel and the West Bank last week that he expects an Israeli-Palestinian peace treaty to be signed by the time he leaves office in January 2009.

Palestinian mourners carry the body of Maher Al-Mabhoh during his funeral in the Jebaliya refugee camp, northern Gaza Strip, Monday, 14 Jan. 2008

Israel and the government of Palestinian President Mahmoud Abbas agreed to restart peace talks after a seven-year break at a U.S.-hosted conference last November.

After the conference, preliminary talks between the two sides stalled because of disputes about Israeli building plans in occupied territory and Israeli military operations against Palestinian militants.

In another development, an Israeli missile attack on a car in the Gaza Strip killed three Palestinian militants late Sunday. The Israeli military says the targeted militants were involved in firing rockets at Israel.

Some information for this report was provided by AFP, AP and Reuters.