ISRAEL'S CONTRACTION ACTIVITIES WILL HARM PEACE PROCCESS

Jerusalem, Jun 16 (PTI) - In a harsh criticism of Israel's
continued settlements in occupied West bank and East
Jerusalem, U.S. Secretary of State Condoleezza Rice has said
it will "harm" efforts to strike a peace deal between Israel
and Palestine.

"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," Rice said in Jerusalem Sunday during a meeting
with Israeli Foreign Minister Tzipi Livni.
The U.S. Secretary of State's seventeenth visit to the
region in the last two years has been overshadowed by the
ongoing investigation against Israeli premier Ehud Olmert on
charges of accepting bribe.

Many analysts have viewed it as the end of the road for
U.S. President George Bush's dream of signing out from office
in style with a Middle East peace treaty.

While castigating Israel over the issue of constructions,
Rice also pressed on the need for putting an end to attacks on
Israeli citizens.

"While the issue of settlement construction may hinder
the peace process, we have to bring attacks on Israeli
citizens to a stop. There is a lot we have to discuss," she
told reporters prior to her meeting with Livni.

The top U.S. diplomat is particularly miffed at a recent
Israel government's announcement that it plans to build 1,300
new homes in disputed East Jerusalem, describing it as "a
problem" and an "obstacle to peace".

"Jewish neighbourhoods in Jerusalem will remain part of
Jerusalem in final status talks, and the truth is everyone
understands that," Israel government's spokesman Mark Regev
told Voice of America.

The Palestinians claim East Jerusalem as the capital of
their future state but Israel says it can build anywhere in
Jerusalem because it will be the capital of the Jewish state
in any final peace agreement.

"This cannot stand. The government of Israel has a
choice, either to continue the settlement activity or to
continue the peace process. It cannot have both," Chief
Palestinian negotiator Saeb Erekat said.

Rice is also scheduled to meet Prime Minister Ehud Olmert
and Defence Minister Ehud Barak before leaving for the West
Bank city of Ramallah, to meet Palestinian President Mahmoud
Abbas, premier Salam Fayyad and head of the Palestinian
negotiating team, Ahmed Qurei.

Palestinian officials have said their leadership would
ask the Secretary of State to pressurise Israel to stop the
settlement activities and live upto its promise of easing
restrictions on Palestinians in the West Bank.