RAMALLAH, West Bank — U.S.-led Middle East peace efforts will not be seen as credible by Palestinians unless a deadline is set for a deal, Palestinian Prime Minister Salam Fayyad told The Associated Press on Saturday.

Israel has rejected a timeline, the U.S. has been cool to the idea and Fayyad said he is not issuing an ultimatum. However, he warned that the situation on the ground is not static and that with continued expansion of Israeli settlements, prospects for a two-state solution are getting dimmer every day.

Palestinians are worse off today than when peace-making began more than a decade ago, and they need "some notion of when this is going to end, particularly since conditions on the ground continue to deteriorate," said Fayyad, 55, an economist and former World Bank official who meets frequently with Israeli leaders and has won the respect of the Bush administration.

In the runup to the U.S.-hosted Mideast conference, tentatively set for late November or early December in Annapolis, Md., Israel must make some "bold moves," Fayyad said in an interview at his West Bank office, with a large Palestinian flag and a wall sculpture of Bethlehem stone as a backdrop.

Secretary of State Condoleezza Rice said she doesn't expect the Israelis and the Palestinians to reach agreement on any framework for peace during her visit Saturday and Sunday in the region.

"They're still working. They're working on some knotty issues," Rice said Saturday, speaking to reporters on her way to Israel. "I want to help make sure they're working in a straight line ahead."

Fayyad said Israel shouldn't just remove West Bank roadblocks and dismantle illegal settlement outposts, as required under phase one of the dormant "road map" plan, but should also free some 2,000 of more than 12,000 Palestinian prisoners, preferably before the Annapolis conference.

"We need to rekindle signs of hope after years of deterioration," he said. "The situation today on the ground is a lot worse than it was when this process began."

Fayyad was installed as prime minister after Palestinian President Mahmoud Abbas fired the Hamas-led government in June, following the Islamic militant group's forcible takeover of Gaza.

Since then, Fayyad has tried to wrest control of the West Bank's streets from Palestinian militants, not only those loyal to Hamas, but also armed gangs with ties to Abbas' Fatah movement. Without first persuading ordinary Palestinians that the streets are safe, nothing else his government does will matter, Fayyad said.

On Friday, some 300 Palestinian officers were deployed in Nablus, the West Bank's most chaotic city, chosen by Fayyad as a test case for his security plan. In recent months, his government also closed Hamas-linked charities, many of them in Nablus, and has tried to dry up funds with anti-money laundering regulations.

Fayyad has not been able to win Israeli guarantees that the Israeli military will halt its frequent arrest raids in Nablus, a Hamas stronghold, but said he moved ahead with an imperfect deal because he felt the need to start somewhere. Israel says it's too early to rely on Palestinian security forces alone.

If the Nablus experiment is a success, Fayyad hopes to deploy forces in more West Bank towns and gradually persuade the Israeli troops to stay out of the population centers for good.

He was too cautious to give an ironclad guarantee that Hamas couldn't one day take over the West Bank. Earlier in the week, a Hamas leader in Gaza, Nizar Rayan, had bragged that Hamas would one day pray in Abbas' headquarters in the West Bank, as it has done in Gaza.

Fayyad said he's preoccupied with "ensuring that what happened in Gaza would not happen in the West Bank."

Fayyad noted that Israeli and Palestinian negotiators covered a lot of ground in previous peace talks which collapsed in 2001, and that there's an emerging international consensus on the contours of a peace deal. Therefore, if the Annapolis conference relaunches negotiations, a peace deal could reasonably be reached within several months, he said.

Israel argues that it's eager to reach a peace deal, and that such assurances should be sufficient.

"Israel is committed to reaching peace with the Palestinians and we want to achieve this in the most expedient way possible based on two states for two peoples," David Baker, an Israeli government spokesman, said Saturday.

Asked about a possible release of prisoners and removal of checkpoints, Baker said the issues were being reviewed.

"Israel is aware of the importance attached to them by the Palestinians," he said.