But after discussions held day and night by teams led by Foreign Minister Shimon Peres and Palestine Liberation Organization leader Yasser Arafat, the two sides failed to reach an agreement in time for the latest target date.
In an effort to deflect speculation that the talks had reached an impasse, the White House said Monday that a delay in the signing would not be considered a setback.
Meanwhile, political sources in Jerusalem said a new target date for signing the completed agreement had been set for Sept. 28.
Although progress was made at the Red Sea resort of Taba on such issues as water rights in the West Bank and the Palestinian elections, differences over control of the West Bank town of Hebron prevented the two sides from reaching an agreement.
But as the week wore on and the two sides reported that they had made progress on Hebron, a new sticking point emerged: Israeli maps indicating planned troop redeployments in the West Bank.
The Palestinians said the maps threatened to "cantonize" self-rule areas into islands surrounded by Israeli-controlled areas.
The talks nearly broke down when Arafat stormed out of a session Tuesday night, charging that the Israelis were "throwing sand in the Palestinians' eyes."
But he agreed to return to the talks two hours later, after U.S. Middle East peace envoy Dennis Ross and Egyptian President Hosni Mubarak telephoned him and urged him to return to the bargaining table.
Peres later told reporters that Arafat had misunderstood the maps. "We don't intend to create cantons on the West Bank," he said.
Even as the week progressed, the sessions continued to be "difficult," as the two sides put it.
News reports were less diplomatic, referring to frayed nerves and flaring tempers. Also threatening the talks was an Israeli decision Wednesday to impose an indefinite closure on Gaza.
The closure, which keeps thousands of Palestinian day laborers from their jobs in Israel, was imposed "for security reasons," said Police Minister Moshe Shahal, who would not elaborate.
Israel reportedly expected terrorist attacks timed to coincide with the High Holidays.
Despite the difficulties, Israeli and Palestinian officials said Wednesday that the talks were in the final stages and only the details of an agreement remained to be worked out.
Progress on one issue at the talks — Palestinian elections — came after Israel reportedly agreed that 82 elected Palestinian representatives would serve in a body that would have legislative and executive powers.
Israel also reportedly agreed for the first time to let Arab residents of eastern Jerusalem participate in the elections.
In an effort to overcome the differences surrounding Hebron, Israel softened its position, saying that it was ready to cede most of its control over security in Hebron to the Palestinians, except in the areas of Jewish settlements.
But the Palestinian side, despite accepting a gradual Israel troop withdrawal in Hebron, ultimately wants the withdrawal to be complete. It also wants Israel to declare that Hebron — along with the six other West Bank cities that will come under self-rule under the terms of the interim agreement — is a Palestinian city.
But the Palestinians dropped their demand for the immediate removal of the 450 Jewish settlers living in Hebron as a condition for signing the agreement.
Army Radio reported that Israel had offered to increase the number of Palestinian police officers stationed in the town from 200 to 250. But the Palestinians were demanding double that figure.
The Palestinians also reportedly asked that joint Israeli-Palestinian patrols be stationed near Jewish settlements in Hebron and near the Tomb of the Patriarchs, the site of a massacre of 29 Muslims by a Jewish settler last year.
Army Radio reported that Israel rejected this demand.
The Israeli daily Ha'aretz reported that the two sides agreed that Israel would have responsibility over Rachel's Tomb, located on the outskirts of Bethlehem, as well as over the stretch of road leading from Jerusalem to the holy site.
The sides also reportedly agreed that Jews and Muslims would have free access to two other sites, Joseph's Tomb and the Tomb of the Patriarchs, and that no physical changes would be instituted at the sites without mutual consent.
The two sides agreed to establish a committee that would notify each side of any archaeological finds.
As for Palestinian prisoner releases, Israel agreed to increase the number of inmates to be freed in two stages from 1,500 to 1,800. The Palestinians are demanding the release of all 5,500 prisoners they say remain in Israeli jails.