Middle East peace talk negotiators agree that 'all issues are on the table' Link to video: Hopes for Israeli-Palestinian peace deal within nine months Palestinian and Israeli negotiators have agreed that "all issues are on the table" in their renewed effort to resolve the Middle East conflict, the US secretary of state John Kerry said on Tuesday. Concluding two days of preliminary talks between the sides, Kerry struck an optimistic note, saying he did not share the view of sceptics who argue Israel and Palestine cannot find common ground to end what he called their "perpetual war." He called the renewed talks - the first in three years - a "new moment of possibility." Flanked by Israeli justice minister Tzipi Livni and veteran Palestinian negotiator Saeb Erekat, Kerry said both sides had agreed to seek a final status agreement within nine months. He said "sustained, continuous, substantive negotiations on the core issues" would begin in the next two weeks in either Israel or Palestine. Livni and Erekat both expressed hopes that the talks would succeed in resolving the conflict and briefly shook hands. The announcement that talks would include all final status issues is a rebuff to those who have argued that issues such as the future of Jerusalem and the right of Palestinian refugees to return to their pre-1948 homeland are too complex to be addressed and should be deferred to a future round of negotiations. The gaps between the two sides on these issues are wide, but they are essential components of a comprehensive agreement. Tony Blair, the representative of the Middle East quartet, comprising the US, European Union, United Nations and Russia, welcomed the announcement of a renewed peace process as a "hugely significant breakthrough." Earlier in the morning, the delegations met with US president Barack Obama and vice-president Joe Biden in the White House. A senior White House official said Obama wanted to hear directly from the negotiators and "underscore for them his commitment and appreciation." The official said the president was "impressed with the outlook and the atmosphere" when he met the negotiators, but told them he was "under no illusions" about the difficulties ahead. Obama's personal involvement is a significant reinforcement of US engagement, and will add to already considerable international pressure on both sides. The negotiation teams also met alone, without any US officials present. Kerry added that both parties had agreed that the negotiations would remain secret and only he was authorised to comment publicly on their progress. Palestinian and Israeli negotiations aimed at reviving the moribund Middle East peace process come amid warnings this could be the last chance to reach an agreement to end the historic conflict. Many observers are expressing doubts over whether the negotiations will be different to previous attempts to resolve the conflict, all of which ended in failure. However, Kerry is determined to push forward with the talks and his personal commitment has been a critical factor in persuading the two sides to meet. He said on Tuesday that future generations "should not be expected to bear the burden" of "continual conflict or perpetual war." "While I understand the scepticism, I don't share it," he said. And I don't think we have time for it. A senior state department official said Kerry was deeply encouraged over the weekend, when the Israeli prime minister, Binyamin Netanayhu, managed to persuade his cabinet to release 104 Palestinian prisoners to help broker the talks - and then released a statement, making the case for a resumption of peace talks. "These were all extraordinary signs as far as we were concerned," the state department official said. During his announcement, Kerry said the Israeli government would in the coming weeks take "a number of steps in order to improve conditions in the West Bank and in Gaza." The inclusion of Gaza suggests US pressure to include the tiny territory, ruled by Hamas for the past six years and both physically and politically separated from the West Bank, in any wider deal. This week, Israel announced it would ease limits on supplies of goods, including fuel, into Gaza following the closure by the Egyptian authorities of almost all smuggling tunnels which supply the population with much of its day-to-day needs. Officials would not be drawn on the specifics of what steps Israel would take to improve conditions in the West Bank and Gaza, except to say they related to "leveraging the private sector" to invest in the territories. "The Israelis have agreed to take some steps," the senior state department official said. Some of this will require the Israelis to change their rules and regulations. On Monday, Kerry formally appointed Martin Indyk, the former US ambassador to Israel, to be his envoy facilitating the negotiations. Indyk will spend a significant amount of time in the region in the coming months trying to broker a deal, US officials have said, although it has not been decided if he will be present at the next round of talks in two weeks. US officials are stressing they are only playing the role of "facilitator" and that the talks remain direct, bilateral negotiations between the parties. However the US secretary's role in the process should not be underestimated. Kerry has traveled to the region six times since February, and made resuscitating peace negotiations a priority for his department. Negotiations began in Washington on Monday evening, when Kerry hosted both parties with an iftar meal to break the Ramadan fast over grilled fish and iced tea. Although both parties have agreed to refrain from making public comments on the substance of the talks, Abbas said in Cairo that a final agreement between the two sides must include a total Israeli military and civilian withdrawal from the territory of a future Palestinian state. The next stage of talks are expected to focus initially on the issue of borders. Other, even more difficult, issues - such as the future of Jerusalem, which both sides want as a capital, and whether any of the 4.9 million Palestinian refugees can return to their former homes, now in Israel - would have to be addressed over the coming months. The senior White House official shed new light on some of the factors that lay behind the decision to resume negotiations. The official pointed out that since the last talks in 2010, there had been new elections in both Israel and the US, and the situation in the security region had changed significantly, particularly with regard to Egypt and Syria. Another factor that may have incentivised Israel to join the table was the threat that Palestine could seek further redress through the UN. In November, Palestinian leaders persuaded an overwhelmingly majority of UN General Assembly members to recognise Palestine as a state. The historic vote was strongly opposed by the US and Israel, and opened the possibility to Palestine seeking redress via the international criminal court. Alluding to that risk, the White House official said that if Palestine had resumed its campaign "either at the UN or other international organisations," it might have caused "a significant amount of friction with Israel." Because to the talks, the prospect of that happening was now "reduced if not eliminated," the official added. It is no secret that one of the motivating factors I think for everybody was to avoid that sort of train wreck that would have happened, that might have happened, if we were not able to get negotiations started.