Rice to meet Middle East leaders

The US Secretary of State, Condoleezza Rice, was to meet with Israeli and Palestinian leaders today to spur US-backed peace talks having said reaching a full deal by the end of the year would be tough. Ms Rice was to hold talks with the Israeli foreign minister, Tzipi Livni, and the former prime minister of Palestine, Ahmed Qurie, who head their respective negotiating teams, before meeting with the Palestinian president Mahmoud Abbas in the West Bank.

Yesterday, at the start of her 18th visit to Israel and the Palestinian territories in the past two years, Ms Rice welcomed Israel's release of nearly 200 Palestinian prisoners but urged both sides to take more steps to build confidence. "We continue to have the same goal which is to reach agreement by the end of the year," Ms Rice told reporters travelling with her on the plane from Washington to Tel Aviv.

"We have a lot of work ahead to do that, and obviously it's a complicated time, but it's always complicated out here," the top US diplomat said ahead of her talks with Israeli and Palestinian negotiators in Jerusalem. The two sides formally relaunched the peace process after a seven-year hiatus at a US-hosted conference last November, with the goal of signing a full peace deal by the time George W Bush leaves office in January 2009.

But they have made little tangible progress on resolving the core issues of the conflict, including final borders, the status of Jerusalem and the fate of the 4.5 million UN-registered Palestinian refugees. The process has been complicated by Israeli settlement expansion in the occupied West Bank, including annexed east Jerusalem, and by the seizure of the Gaza Strip by the Islamist Hamas movement in June 2007.

In the latest sign of the difficulties faced by the talks, the Israeli settlement watchdog Peace Now released a report saying that construction of settlements in the occupied territories has doubled since last year. "Construction in the settlements has increased by a factor of 1.8 by comparison to the same period last year," the group said in a report, citing government statistics. "The housing ministry initiated 433 new housing units during the period of January to May 2008, compared to just 240 units during the period January to May 2007," it said.

The international community considers all settlement projects in the occupied territories to be illegal and the Palestinians have repeatedly said the expansion of settlements is the greatest obstacle to peace. This is Rice's first visit since the Israeli prime minister, Ehud Olmert, said on July 30 that he will resign to battle corruption allegations after his Kadima party chooses a new leader in September - another cloud on the horizon.

Ms Livni, who is leading Israel's negotiating team with the Palestinians, is a front-runner to replace him, as is Transport Minister Shaul Mofaz, a hawkish former general. A US State Department official, speaking on condition of anonymity yesterday, acknowledged that "expectations are pretty low" among both publics, but said he believed a deal could still be struck by year-end. But he warned the Bush administration not to "repeat the error of the past" by making an 11th hour long-shot bid for peace that fails and dashes all hopes.

Ms Rice joined Israeli defence minister Ehud Barak for dinner in Tel Aviv Monday evening. *AFP