Rice puts pressure on Israel to support Palestinian state as precursor to peace `road-map' back on track

CONDOLEEZZA RICE, the US Secretary of State, urged Israel last night to continue making the "hard decisions" needed for the creation of a Palestinian state as she arrived for talks with the leadership of both sides.

Ms Rice went out of her way in her first meetings to caution Israel against taking steps that would undermine the new Palestinian President, Mahmoud Abbas, proclaiming it was a "time of optimism because fundamental changes are underway in the Middle East as a whole".

Ms Rice, who will meet Mr Abbas in Ramallah this morning issued a specific caution. Before meeting the Israeli Foreign Minister, Sylvan Shalom, she warned against steps in Jerusalem that could weaken Palestinian support for Mr Abbas.

Palestinians see the planned seizure of land in the city from its West Bank owners - overturned last week by Menachem Mazuz, Israel's Attorney General - as only one of a series of steps deliberately expanding the Jewish presence in Arab East Jerusalem, which Palestinians want as the capital of a future state.

The visit by Ms Rice, who met the Israeli Prime Minister, Ariel Sharon, for dinner last night, opened a week of the most intense Middle East diplomacy since the beginning of the Palestinian uprising four and half years ago. The meetings will culminate in tomorrow's summit between Mr Sharon and Mr Abbas in Sharm El Sheikh.

The immediate crisis over prisoner releases that had threatened a smooth run-up to the summit appeared to have been defused, at least in the short term, by Israel's agreement to form a joint committee with the Palestinians for considering who should qualify.

During talks with Mr Shalom, Ms Rice praised Israel for its response to the fragile fortnight-old truce but cautioned Israel against taking steps which might undermine Mr Abbas's leadership. Mr Shalom had earlier told her that: "We all want [Mr Abbas] to succeed."

Mr Shalom, whose hawkish public statements on the advances since Mr Abbas' election have been partly tuned to his base on the Likud right, had earlier treated Ms Rice to a double-edged analysis on the progress to date.

On a "glass half-full" estimate, Israeli officials quoted him as having told the Secretary of State that Mr Abbas had done "very positive things," had deployed security forces in Gaza and largely prevented Qassam rockets being fired into Israel. But on a "glass half-empty" analysis, he had failed to disarm or arrest militants. Mr Shalom added "there has to be a strategic decision against terrorism".

Nor had Mr Abbas, reportedly at loggerheads with his Prime Minister, Ahmed Qureia, yet formed a new Cabinet, Mr Shalom pointed out.

After their meeting, Mr Shalom said that he had laid out Israel's demands of the Palestinians. "If the Palestinians do not do everything to halt the smuggling of weapons through tunnels, close the tunnels, close the weapons workshops, gather up illegal weapons - we would simply be giving the violent groups time to regroup and then carry out terror attacks that could collapse the whole process," he said.

While stressing the fundamental importance of Israel going ahead with its plan to disengage from Gaza, the Secretary of State was said to have stressed the importance of both the Israelis and the Palestinians honouring their commitments to the road map to peace.

Israeli officials acknowledged that was a clear, if implicit, reference to the need to dismantle illegal outposts and settlements as well the Palestinian obligation to begin disarming and dismantling the infrastructure of armed factions.

Paul Patin, a spokesman for the US Embassy in Tel Aviv, had said earlier that Ms Rice would bring up a wide range of issues. These included Israel's commitment to start dismantling outposts and the need for gestures to the Palestinians, such as removing checkpoints, which would bolster confidence in the new leadership.

Senior officials were at pains to pour cold water on media reports that Ms Rice's visit was unwelcome to Israel after her comments last Monday. She said that Israel needed to "make fundamental choices" in order to ensure the creation of a "contiguous" Palestinian state without which a lasting peace would be impossible.

Advisers to Mr Sharon have made no secret of their unwillingness to see early moves to "final status" talks under the road map, which would require tackling the sensitive issues of borders, refugees and the status of Jerusalem. Ms Rice said: "I hope we all get into a mindset that says if the parties are able to move on their own, that's the very best outcome."