JERUSALEM -- U.S. Secretary of State James A. Baker III and Israeli leaders reached at least a temporary impasse yesterday in talks for organizing a regional peace conference, dissipating an air of optimism from their sessions last week.
Mr. Baker, in his third visit here within the last five weeks, met again with Foreign Minister David Levy and in a separate meeting with Prime Minister Yitzhak Shamir, but indicated that there were disagreements blocking further progress.
Margaret Tutwiler, the State Department spokeswoman, said Mr. Shamir asked for time to formulate a response to U.S. proposals for narrowing the differences between Israeli and Arab conditions for a peace conference.
"There are a number of outstanding issues that will have to be worked out and resolved if a process is to result," Ms. Tutwiler said in a brief statement issued at the end of five hours of talks. Mr. Shamir promised he "would be back in touch with Secretary Baker," at a time and manner to be decided by Israel.
While neither side offered details about the discussions, Mr. Shamir has publicly rejected several conditions sought by Arab states and Pal
estinians. He has ruled out any involvement by Palestinians from East Jerusalem and objected to Arab proposals for the conference to be more than a one-time, ceremonial event to launch direct Arab-Israeli talks.
U.S. officials also renewed criticism of Israel's policy of expanding Jewish settlements in the West Bank and Gaza Strip and to the establishment of a new settlement earlier this week.
Avi Pazner, a spokesman for Mr. Shamir, said talks with Mr. Baker would resume but gave no date.
"Secretary Baker brought with him some ideas which he came with, after his talks with various other countries and factors involved in the peace process," Mr. Pazner said. "There is a need for further consultation and thoughts, and the talks will continue. We have not decided how and when."
"It is impossible to reach conclusions now," he said. "We must speak more."
After his meetings, Mr. Baker made an unannounced tour of Jerusalem's Old City and traveled to the West Bank city of Bethlehem.
This latest round of talks was unwelcome evidence for Mr. Baker that the hardest part of his task will be getting the various parties to drop some of their demands for how to run the regional conference, which all the parties signal that they accept in principle.
A week ago, Mr. Levy declared that Israel accepted such a conference. Mr. Baker immediately cautioned that there was "a long, long way to go." Ever since, progress apparently has been more difficult.
Mr. Baker's efforts are complicated by divisions among some of his would-be partners. Mr. Shamir, head of the rightist Likud party, is challenged by some of his own ministers, who warn that a regional conference threatens Israel's security. Palestinians are divided over the wisdom of even meeting with Mr. Baker, and most factions have decided not to participate.
In recent days, Mr. Shamir has sounded alternately conciliatory and uncompromising. He agreed to offer a limited conference role to members of the European Community, as sought by some Arab states, but rejected calls to stop the expansion of Jewish settlements.
Mr. Baker is likely to encounter similar problems today in his scheduled meeting with a three-member Palestinian delegation led by Faisal Husseini, the leading Palestinian activist in East Jerusalem.
Mr. Husseini's group submitted a list of questions to the U.S. consul, Philip Wilcox, asking for details about issues that have gone unresolved for years.
The Palestinians asked how much authority a Palestinian government would have under a scheme of limited self-rule, whether settlement activity would continue during peace negotiations, how the United States would guarantee a peace agreement and how a Palestinian delegation would be chosen for talks.
Mr. Baker met for nearly two hours with Mr. Levy and talked with him again by telephone after meeting with Mr. Shamir. Mr. Baker and Mr. Shamir met alone for 90 minutes, then were joined by senior advisers for another 90 minutes.
Ms. Tutwiler said Mr. Baker suggested "how to bridge the gaps" between Arab and Israeli positions for a conference leading to direct negotiations between the parties. "Understandably," she said, "the prime minister has asked for some time to consider these suggestions before getting back to the secretary."
Mr. Baker's schedule includes no fixed date for a return to Washington and would allow him to return to Israel as early as Tuesday. After his meeting with Palestinians, he is scheduled to travel to Jordan for a meeting with King Hussein and to travel later to Egypt.
Tomorrow, he is to fly from Cairo to Jidda, Saudi Arabia, and on Monday he travels to Kuwait and Syria.