Rice pushes for peace progress; Israel denies agenda for settlements

JERUSALEM -- Facing mounting Palestinian frustration at the pace of peace talks, the United States leaned on Israel on Sunday to lift restrictions that chafe West Bank residents and stifle an already limping economy.

Secretary of State Condoleezza Rice did not directly criticize close U.S. ally Israel, but had unusually direct remarks about the consequences of Israeli housing and roadblocks in the West Bank. Palestinian claims that Israel is deliberately expanding Jewish settlements on land the Palestinians claim for a state have dampened the high hopes for a peace deal before President Bush leaves office next year.

Asked about settlements, Rice said she "continues to raise with the Israelis the importance of creating an atmosphere that is conducive to negotiations."

"That means doing nothing, certainly, that would suggest that there is any prejudicing of the final terms," of a deal setting up a separate Palestinian state in the West Bank, Rice continued. "The United States will consider nothing that is done to have prejudiced the final status negotiations."

Rice emphasized that a year-end goal for an Israeli-Palestinian peace deal is still achievable, even though both sides question whether the target is realistic.

Both sides face new obstacles unrelated to the substance of peacemaking. Palestinian President Mahmoud Abbas, 73, underwent an unannounced heart test last week, raising new questions about his health and the lack of a clear succession plan within the moderate West Bank government he leads. Israeli Prime Minister Ehud Olmert has become the subject of a new police investigation, the fifth since he took office two years ago.

A gag order has been imposed on the Olmert case. But speaking to his Cabinet on Sunday, Olmert said the case has unleashed a wave of "malicious and wicked" rumors and pledged to push forward with his agenda.

He also confirmed reports that he would meet with Abbas today. The two leaders meet regularly to assess progress.

Abbas has sounded increasingly pessimistic. He accuses Israel of undermining talks by continuing to build Jewish settlements on lands the Palestinians claim for a future state, and refusing to remove hundreds of military checkpoints that dot the West Bank.

The Bush administration is serving as a proctor for the first direct high-level peace negotiations between Israel and the Palestinians since talks broke down amid violence more than seven years ago. The closed-door talks have yielded no obvious successes, although all sides say the atmosphere is good.

Rice shuttled between Israel and the West Bank, passing red-roofed Jewish settlements and illegal outposts as she went, to prod progress ahead of Bush's commemorative visit to Israel later in May. He is marking the 60th anniversary of the Jewish state, which has rankled some Palestinians who say the United States is too close to Israel to act as an honest broker. Bush will not venture next door to the Israeli-occupied West Bank, as he did during his first visit to Israel as president in January.

Israel isn't trying to expand Jewish housing to effect a land grab before an eventual military withdrawal, the country's senior diplomat said.

"I can assure you Israel has no hidden agenda," Foreign Minister Tzipi Livni said.

Livni pointed to Israel's 2005 withdrawal from the Gaza Strip as proof that Jewish settlements "are not obstacles" if the government decides it has a larger aim of peace or political settlement with the Palestinians.

Livni is leading settlement talks for Israel. She spoke between meetings with Rice, including a joint session with the Palestinians' lead negotiator.

In the West Bank, Rice said Israeli gestures in the West Bank must have a "real effect" on the lives of people there. "We are trying to look not just at quantity, but also quality of improvements."

Israel maintains hundreds of roadblocks and checkpoints throughout the West Bank, saying they are needed to protect settlements and prevent would-be attackers from crossing into Israel. The Palestinians claim the travel restrictions have stifled their economy and made free movement in an area they claim for their independent state extremely difficult.

Rice said she had discussed the lifting of Israeli roadblocks, but did not say Israel made her any new promises. When Rice visited in March, Israel promised to remove 61 roadblocks. The United Nations reported that only 44 have been dismantled, and most of them had no or little significance.

"It was the first time that I had raised this issue, and so it will be now a discussion as to how to carry out that concern, or how to address that concern," Rice said.

At the same time, she acknowledged there is a "real security dimension" for the Israelis.

There was one suicide bombing last year and there have been two suicide bombings this year so far, one in Dimona and the other a few days ago at the Kerem Shalom crossing. That's down from a high of 59 in 2002, the year Israel began building a separation barrier through the West Bank and multiplying its military checkpoints and roadblocks.

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AP reporters Mohammed Daraghmeh in Ramallah and Amy Teibel and Josef Federman in Jerusalem contributed to this report.