The talks come after US President George W. Bush said this week that he remains hopeful of a Middle East peace deal before he left office in January, while warning that the Islamist Hamas group could "undermine" the effort.

Foreign ministers of the Mideast Quartet -- the United States, Russia, the United Nations and the European Union -- will meet in the morning, followed by talks on aid to the Palestinian territories.

In the afternoon Rice will meet her counterparts from Britain, France, Germany, Russia and China to discuss Iran.

Rice, who will head to Israel and the West Bank after London, reaffirmed "unwavering" US support for Israel on the eve of the trip, while saying the Jewish state will have to make "difficult and painful compromises."

"Israelis have waited too long for the security they desire and they deserve. Palestinians quite frankly have waited too long for the dignity of an independent state," she said Tuesday in Washington.

Bush, who formally restarted Mideast peace negotiations in November last year after a seven-year freeze, said Tuesday that he was "still hopeful we will get an agreement by the end of my presidency."

The US president will visit Israel, Saudi Arabia, and Egypt from May 13 to 18.

On Iran, the six-power grouping -- comprising the five permanent members of the UN Security Council plus Germany -- will discuss the next steps in seeking to persuade Tehran to rein in its disputed nuclear programme.

Specifically the ministers are working on a joint proposal aimed at bringing Tehran back to the negotiating table and in line with UN resolutions. Talks in Shanghai in mid-April failed to reach agreement.

The West fears Iran wants to use its nuclear programme to make an atomic weapon but Iran insists the drive is peaceful and solely aimed at providing energy for a growing population.

Tehran has been hit by three sets of UN Security Council sanctions, while the United States has also pressured European firms and banks to reduce their dealings with Iran.

In Berlin, a spokesman for the German foreign ministry said the talks would seek to make progress on the twin-track approach towards Iran, comprising the threat of sanctions with an offer of cooperation.

"We will continue the discussion Friday on how we can start talks with Tehran and in what framework; how we can take a step towards Iran if an opportunity arises," he said.

The French foreign ministry underlined their desire to "prove once again their desire to negotiate by presenting Iran with a new offer of cooperation based on the one they presented in 2006," said a spokesman.

On the eve of the talks, a US government report said Iran remained the world's "most active" state sponsor of terrorism as it tries to build regional influence and drive the United States from the Middle East.

"A critically important element of Iranian national security strategy is its ability to conduct terrorist operations abroad," said the US State Department annual report released Wednesday.

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