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CAIRO: US Secretary of State Hillary Clinton said on Wednesday the future of Jerusalem must be on the agenda of any Middle East peace talks, as the Palestinians again took Israel to task over Jewish settlements in the city's Arab eastern sector.
Speaking after hastily-arranged talks with Egyptian President Hosni Mubarak to clarify remarks widely interpreted as a U-turn on US policy of demanding a freeze on all Jewish settlements, she said Washington is determined to push for a Palestinian state.
"There is no doubt that moving toward a state that reflects the aspirations and the rights of the Palestinian people must include all of the issues that have been discussed and mentioned by President (Barack) Obama, and that includes Jerusalem," she said.
Palestinian chief negotiator Saeb Erakat said the settlement freeze must extend to the whole West Bank, including Israeli-annexed east Jerusalem, if peace talks are to resume.
"If (Israeli Prime Minister Benjamin) Netanyahu continues building 3,000 housing units, excluding Jerusalem and public buildings, this is a non-starter," he said, speaking in the West Bank city of Ramallah.
At a Cairo news conference with Egyptian Foreign Minister Ahmed Abul Gheit, Clinton said: "We want to assure you that our goal is a real state, with a real sovereignty.
"Nothing can interfere with our commitment and our resolve to move forward, and there are impediments, yes, but we cannot let anything deter us."
Clinton extended a regional trip at the last minute to meet Mubarak after creating a storm by praising an Israeli plan to limit, but not freeze, settlement construction.
On Wednesday, she said the settlements were illegitimate but again described Israel's plan as "unprecedented."
"Our policy on settlement activity has not changed. We do not accept the legitimacy," she said, adding that the Israeli offer, which would allow a limited expansion of the settlements, was "not what we prefer."
But "what we have received from the Israelis... is unprecedented," she said. "It's a positive movement... just like the Palestinians made progress on security."
Israel considers the whole of Jerusalem to be its "eternal, indivisible" capital, and does not regard Jewish neighbourhoods in its eastern sector as settlements.
Arab officials have accused the Obama administration of reneging on its call earlier this year for a complete halt to settlement construction, including in east Jerusalem, and said Clinton's clarifications did not go far enough.
The Palestinians did not require a freeze of settlements during the last round of direct peace talks between November 2007 and the outbreak of the Gaza war last December, but Erakat insisted this time was different.
"Negotiations will not continue for the sake of negotiations," he said. "Israel has the choice, settlements or peace. I hope and pray they choose peace."
The Egyptian foreign minister, who had said Cairo wanted Clinton to clarify her remarks, described his and Mubarak's meetings with her as "very useful."
He blamed Israel for stalling the peace process but appeared to suggest a softening of Egyptian support for the Palestinians' refusal to resume talks in the absence of a settlement freeze.
"Israel is putting conditions to start negotiations by continuing to hold on to settlement activity," he told reporters.
"We should focus on the end of the road and not lose the issue by holding on to this or that as a precondition for negotiations."
But Arab League chief Amr Mussa took a tougher line.
"Asking the Palestinians to resume negotiations without a halt to settlements is unacceptable," he told reporters in Cairo.
"If (the US administration) is unable to stop settlement activity or even freeze it temporarily, which is simple, can we really believe that an agreement can be reached so easily on the creation of a Palestinian state in the 1967 borders, including Jerusalem?" - AFP/so/de
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