Settlements could harm peace talks, Rice warns

US Secretary of State Condoleezza Rice warned that Israel's decision to build another 1,300 houses for Jewish settlers in occupied East Jerusalem could "harm the negotiations going forward".


US Secretary of State Condoleezza Rice on Sunday warned that Jewish settlement expansion could harm peace talks as she made a new bid to inject impetus into the faltering Middle East peace process.

Rice said she would use her visit -- her 17th visit to the region in less than two years -- to press Israel to curb settlement growth on occupied Palestinian land.

"I am very concerned that at a time when we need to build confidence between the parties, the continued building and the settlement activity has the potential to harm the negotiations going forward," she told reporters.

Israel decided last week to build another 1,300 houses for Jewish settlers in occupied and annexed east Jerusalem, which the Palestinians want as their future capital.

Since the US-backed peace talks were formally relaunched in November they have been hobbled by continued settlements projects, violence in the Hamas-ruled Gaza Strip and a growing Israeli political crisis.

"The situation in the Middle East, like always, is complicated," Israeli Foreign Minister and chief negotiator Tzipi Livni told reporters before meeting Rice.

"And while negotiating with the Palestinians, we need to address also difficulties on the ground, especially the situation in the Gaza Strip."

Rice travelled to the West Bank town of Ramallah on Sunday and went into a meeting with Palestinian president Mahmud Abbas, who together with Israeli Prime Minister Ehud Olmert has renewed a commitment to the 2003 peace roadmap.

Under the roadmap the two sides agreed to end violence and freeze settlement construction, but Israel has insisted on its right to build in east Jerusalem and settlement blocs, which it aims to keep in any future peace agreement.

"The gap in the negotiations between the two sides is still very wide... there has been no progress on any of the final-status issues," senior Palestinian negotiator Saeb Erakat told AFP.

"The main obstacle that is destroying the peace process and the trust in it is the continuation of the settlements and the imposition of facts on the ground," he said ahead of Rice's meeting with Abbas.

The secretary of state was to meet separately with Olmert.

Negotiations have also been overshadowed by a political crisis in Israel springing from a probe into Olmert's past financial dealings that threatens his political future and the survival of the fragile ruling coalition.

On Sunday, Rice also met Israeli Defence Minister Ehud Barak, who has warned that his Labour party would join the opposition in voting to dissolve parliament if Olmert's Kadima party does not name a new prime minister.

The Israeli military's chief of staff Gaby Ashkenazi joined the talks.

Later Rice was to hold a three-way meeting with Barak and Palestinian prime minister Salam Fayyad to discuss efforts to boost the West Bank economy.

Rice said she would also press Israel to take concrete steps to ease freedom of movement in the occupied West Bank, including lifting more of the over 500 roadblocks and checkpoints scattered across the territory.

"I understand the security considerations as well as anyone but the obligation was undertaken to improve the lives of the Palestinians," she told reporters ahead of her arrival in Israel late on Saturday.

Her visit comes a year after Hamas's bloody takeover of Gaza, where Israel is mulling whether to launch a major offensive to halt rocket fire despite Egyptian efforts to forge a truce.

A top Israeli official told AFP there had been "significant progress" in negotiations but that the truce would not include the release of captured Israeli soldier Gilad Shalit.

Representatives of the Islamist movement Hamas were in Cairo on Sunday to receive Israel's response to the Egyptian-mediated ceasefire proposal.

Rice was also to hold a joint meeting with the heads of the negotiation teams -- former premier Ahmed Qorei for the Palestinians and Livni, who is widely favoured to succeed Olmert in the absence of early elections.

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