JERUSALEM, Feb 7 (AFP) - US Secretary of State Condoleezza Rice was to hold her first talks with the new Palestinian leadership Monday after urging Israel to take the "hard decisions" needed to advance the Middle East peace process.

Rice, who arrived Sunday urging both sides to seize "a time of opportunity" to make peace, was to travel to the West Bank city of Ramallah to meet with Palestinian President Mahmud Abbas and his top aides.

It will the first visit by a senior US leader to the seat of the Palestinian Authority since Rice's predecessor Colin Powell made the trip nearly three years ago in a failed bid to halt a spiraling cycle of violence.

State Department spokesman Richard Boucher said they would "review how the United States can help build the institutions of a democratic state that can live side by side in peace" with Israel.

Rice made her inaugural trip here as chief US diplomat amid rising hopes for a revival of negotiations fueled by Israel's decision to pull out of Gaza and Abbas' tough line against Islamic militants.

She flew in on the eve of the first Israeli-Palestinian summit in more than four years bearing a double-edged message: Israel's need to make tough choices and the Palestinians' need to back up promises with action.

Boucher said she was also discussing a "security mechanism" to help the Palestinians build up their forces and further cooperation to end the violence that has left 4,700 people dead since September 2000.

Rice met Sunday for 45 minutes with Israeli Foreign Minister Silvan Shalom and held 2-1/2 hours of talks with Prime Minister Ariel Sharon, including a working dinner at his residence.

While pledging to help Israel curb attacks by Palestinian mlitants, Rice made it clear that the Jewish state had its own obligations in efforts to revive the US-backed "roadmap" for peace.

"We will ask of our partners and our friends here in Israel that Israel continues to make the hard decisions that must be taken in order to promote peace and to help the emergence of a democratic Palestinian state," she said.

Boucher said Sharon briefed Rice on Palestinian demands for the release of thousands of prisoners held by the Israelis. Other conciliatory moves such as the dismantling of checkpoints where possible were also discussed.

And in an interview with local television, Rice warned the Israelis "to do nothing that would somehow prejudge the outcome of a final status agreement in terms of territory."

After shunning the late Yasser Arafat, US officials feel they have a serious Palestinian negotiating partner in Abbas, whom Rice called in a BBC interview "a real plus for the process."

But the secretary of state also signaled she would have a strong message for the new Palestinian leader before he headed to the Egyptian resort town of Sharm el-Sheikh for Tuesday's summit with Sharon.

"This is a hopeful time but it is a time also of great responsibility for all of us to make certain that we act on the words that we speak," she said.

She echoed the words of her Israeli counterpart Shalom, who also hailed "the time of great opportunity" before the parties but cautioned: "The real test is of actions and not declarations."

Tuesday's summit is set to finalise a series of agreements on issues such as the release of some 8,000 Palestinian prisoners and the transfer of security control in certain cities within the West Bank.

Israel has so far agreed to release 900 prisoners but only those who have not taken part in deadly attacks. The criteria and numbers have upset the Palestinians who want long-term prisoners freed.

In an effort to avoid the issue overshadowing the summit, the two sides agreed in Tel Aviv late Saturday to set up a joint committee which will discuss the list of those to be freed after the conclusion of the summit.

In her interviews on Israeli television, Rice said the United States could not put much pressure on the Jewish state over the issue.

"Obviously the release of prisoners is an important part of the discussions between the Israelis and the Palestinians and we are supportive of whatever it takes to move the process forward," she said.

"But I would not presume to try to pronounce on any particular prisoner release."

Meanwhile the mainstream Palestinian group Fatah said Sunday it was ready for a "total ceasefire" with Israel, after a meeting in Gaza City chaired by Palestinian leader Abbas.