U.S. & World

TEL AVIV, Israel (AP) ― Secretary of State Condoleezza Rice criticized Israeli settlement activity in exceptionally harsh language on Sunday, saying new construction projects on disputed land were having a "negative effect" on Mideast peace talks.

Rice made the comments during her latest attempt to prod Israelis and Palestinians toward a final peace deal by the end of the year.

After a meeting with Palestinian President Mahmoud Abbas, Rice said the U.S. remains committed to the target date. But she said Israeli plans to build thousands of homes in the West Bank and east Jerusalem were hurting the negotiating atmosphere. Last week, Israel said it would build 1,300 new apartments in east Jerusalem.

"It's important to have an atmosphere of trust and confidence," Rice told reporters. "Unfortunately, I do believe, and the United States believes, that the actions and the announcements that are taking place are indeed having a negative effect on the atmosphere for negotiations."

Rice stressed that the United States won't regard any settlements Israel build as permanent.

"We should be in a position of encouraging confidence, not undermining it. No party should be taking steps at this point that could prejudice the outcome of the negotiation," Rice said.

The U.S. diplomat said she had made her point to each of several senior Israeli officials she saw Sunday, and she said she would do the same later at a dinner with Prime Minister Ehud Olmert. The Israeli leader's office declined to comment.

Rice's agenda also includes a three-way meeting with the chief Israeli and Palestinian negotiators, and another joint meeting with Israel's defense minister and the Palestinian prime minister set for Monday. She cautioned that she did not expect any "blinding breakthroughs."

Palestinian leaders repeatedly have said Israeli settlement construction was undermining public support for peace talks. "We consider the settlements as the biggest obstacle to the political process," Abbas told Sunday's news conference.

The Palestinians claim all of the West Bank as part of a future independent state, with east Jerusalem as its capital. Israel captured both areas in the 1967 Mideast War. Today, some 250,000 Israelis live in West Bank settlements, along with 180,000 Israelis in east Jerusalem.

Under the U.S.-backed "road map" peace plan, Israel has pledged to halt all settlement activity. But Olmert has said he would continue building in West Bank settlements that Israel expects to retain under a final peace agreement.

He also says the freeze does not apply to east Jerusalem, which Israel annexed after the 1967 war. The annexation has not been internationally recognized.

Rice, however, said the status of all disputed land must be resolved through negotiations, and existing Israel settlements would not prejudice those talks. She said European leaders with whom she had just met similarly thought that settlement construction had hurt negotiations.

Israel and the Palestinians resumed peace talks last November at a summit in Annapolis, Maryland. At the time, they pledged to try to reach a peace deal by the end of 2008, just before President Bush leaves office.

In her comments, Rice voiced frustration over the slow pace of negotiations.

"This is not easy; it has not been easy at any time," she said. "If it had been easy I think we would have probably ended this conflict by now and had an agreement."

She noted only minor improvements in the quality of life in the West Bank, where travel and commerce are hindered by a network of Israeli roadblocks, and Israel's failure to keep its promises to remove unauthorized West Bank outposts, tiny enclaves put up by Jewish activists to expand settlements.

"I recognize that we haven't made the progress that we would like to in terms of movement and access and removal of barriers," she said. "Particularly I am concerned about the outposts, which are illegal, even under Israeli law, and so I would hope to see more movement."

The talks have been complicated by a widening corruption investigation of Olmert, who is suspected of improperly accepting hundreds of thousands of dollars from U.S. donors, in part to finance a lavish lifestyle.

The investigation has put heavy pressure on Olmert to step aside, a move that would likely lead to new elections and put peace talks on hold for months. In recent weeks, both Israeli and Palestinian officials have voiced doubts about the year-end target.

Rice played down Olmert's problems as an internal Israeli matter, and said she still saw a "strong commitment" by both sides to reach a peace deal.

Adding to the difficulties is the situation in the Gaza Strip, which is ruled by the Islamic militant group Hamas.

Israel battles militants in the Hamas-controlled territory almost every day, and it has said it would not carry out any peace agreement until Abbas regained control of Gaza. Hamas, considered a terrorist group by Israel and the U.S., seized control of Gaza from Abbas' forces in June 2007.

Egypt has been trying to broker a truce between Israel and Hamas but has not succeeded so far. Hamas officials were scheduled to meet with Egypt's powerful intelligence chief on Sunday.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)