Jerusalem (CNSNews.com) - The Bush administration, while not sending a special envoy to intensive Israeli-PA talks now underway in Egypt, said it was keeping an eye on the proceedings and "getting readouts from both sides."

The decision shows a marked departure from the policies of the former Clinton administration, whose heavy hands-on approach to peacemaking through the 1990s drew harsh criticism this week from the Palestinian Authority.

Israeli and PA negotiators entered their third day of talks on Tuesday, with conflicting reports of progress. Publicly, both sides have stuck to apparently irreconcilable "red lines" on the future of Jerusalem and Palestinian refugees.

Foreign Minister Shlomo Ben-Ami, who is heading the Israeli team, said that he doubted that an agreement would be reached during this round of talks.

While a senior Israeli negotiator was quoted as saying the sides would begin to draft those parts of a framework agreement on which they were agreed, PA negotiator Yasser Abed Rabbo said this would not begin until all issues are resolved.

Meanwhile speculation rages about what concessions Israel has offered to make at the talks in Taba, an Egyptian Red Sea resort.

Some reports suggested Israel was ready to share sovereignty with the PA over the Temple Mount and other Jewish, Christian and Muslim holy sites.

In response, Prime Minister Ehud Barak's office issued a statement Tuesday saying "in every instance and under every plan the holy places will be under our sovereignty."

Barak added that free access would be guaranteed to worshippers of every religion.

The PA continues to demand that eastern Jerusalem, including the Temple Mount (Haram al-Sharif), fall under its sole authority. Chief negotiator Saeb Erekat said the PA had also rejected an earlier proposal for international sovereignty over the site, which is revered by Jews and Muslims.

Israeli Minister Amnon Lipkin-Shahak also denied reports that Israel may agree to absorb the first generation of Palestinian refugees who left their homes in what is now Israel.

Earlier, in his first contact with the new administration in Washington, Barak outlined Israel's "red lines" in a phone call to Secretary of State Colin Powell, whom he has known for some 20 years.

These include "fierce resistance" to taking in Palestinian refugees, insistence that 80 per cent of Jewish settlements be annexed to Israel in blocs, and that the Temple Mount not change hands.

PA Condemns Clinton's Policies

Before leaving office, former President Clinton laid out what he saw as the only possible plan for a peace agreement. It called for Israel to relinquish sovereignty of the Temple Mount and agree that Jerusalem be divided. In return, the PA would have to give up its insistence on refugees' "right of return."

The PA this week lashed out at the former president in an uncharacteristic statement, accusing Clinton of a pro-Israel bias during his term in office. His policies, it said, had fuelled anti-Israel and anti-American sentiment in the Middle East.

Saying that the peace process had become "a goal in and of itself" during the last seven years, the PA charged that ongoing negotiations had given the "false impression" that continuing in the process could substitute for peace itself.

"Thus, the difficult substantial issues at the core of the conflict ... have been constantly deflected in order to maintain talks without requiring Israel to face up to its obligations," the PA charged.

The U.S. advocacy of "constructive ambiguity" had led both parties to "have mistakenly assumed at different times that either the Israelis had accepted to end the occupation or that the Palestinians had agreed to forgo some of their fundamental rights as a result of vaguely worded agreements," it said.

Israel and the PA have signed no less than five interim agreements, but they often left crucial passages vague and open to interpretation.

"Unfortunately, the U.S. emphasis on process over substance has led the domestic constituencies of many governments in the region to conclude that the peace process was only a mirage designed to trick their governments into prematurely establishing economic ties that would help Israel break out of its regional isolation."

This, the PA said, had promoted not only anti-Israel sentiments in the Middle East but anti-American sentiments, too.

The Bush administration has said it will develop its own policy foreign policy. Powell, rather than the president, is expected to be represent Washington's active role in the peace process.

Bush is also reportedly considering what to do with another unfulfilled Clinton promise - that of moving the U.S. Embassy to Israel from Tel Aviv to Jerusalem.

Clinton promised eight years ago to move the embassy should he be elected. Congress made that move mandatory in 1995 with the passage of the Jerusalem Embassy Act.

But, when the law was due to be enforced in 1998, Clinton avoided doing so by signing successive waivers based on national security concerns.