Rice says settlement expansions weaken Palestinian confidence

Israel continues hindering peace process

Israeli PM linked to fraud case, rumors fly about his fate

Israelis, Palestinians' historic dreams 'impossible' – Rice

U.S. Secretary of State Condoleezza Rice admitted that expanding Israeli settlements in West Bank affect on confidence atmosphere between Israel and the Palestinian National Authority (PNA).

Rice was speaking in a joint news conference with Palestinian President Mahmoud Abbas in Ramallah following a meeting.

Rice told the reporters that they discussed the issue of the settlements, she added that the construction of the settlements weaken the confidence in the negotiations between the two sides.

Rice suggested she will lean on Israel to yank West Bank roadblocks that Palestinian President Mahmoud Abbas says strangle the Palestinian economy.

"I understand that everyone - President Abbas, I, the president, would like to see things move more quickly," Rice said. "That's why we keep coming and pressing all the parties to meet their obligations."

For his part, Abbas urged Israel to carry out the first phase of the Road Map plan since it was the reference of the Israeli-Palestinian peace talks which resumed following a U.S. initiative in November.

The first phase, according to Abbas, is stopping the constructions of the Israeli settlements in West Bank, reopening the PNA institutions in Jerusalem and ending all the measures that Israel took after the eruption of the second Palestinian Intifada (Uprising) in 2000.

Earlier last month, Israel revealed plans to build and expand 100 homes in two West Bank settlements, violating the U.S.-backed Road Map peace plan which is considered reference of the Israeli-Palestinian peace talks.

Meanwhile, the two top officials also talked about easing the life of the Palestinians in the Abbas' Fatah-dominated West Bank by lifting the Israeli checkpoints and restoring order by allowing the deployment of pro-Abbas forces in the West Bank towns. Asked if she received Israeli promise to remove some of the roadblocks, Rice said she spent so much time in this issue, calling to consider Israel's security. She also linked between lifting the roadblocks and the improvement of the Palestinian security forces' performance.

President Abbas hoped to deploy the PNA's forces in every Palestinian town after being deployed in northern West Bank city of Jenin to restore order. The deployments are part of the U.S.-backed Road Map peace plan.

President Abbas deployed more than 480 Palestinian security forces in northern West Bank town of Jenin, as part of the government's security plan. The moves will be covered some 50villages and is supposed to last for three months.

Abbas also renewed the PNA's commitment to negotiations and peace process with Israel.

As part of the commitment, Abbas noted he would meet Israeli Premier Ehud Olmert while the heads of the negotiation teams, former Palestinian Prime Minister Ahmed Qurei and Israeli foreign minister Tzipi Livni would meet the same day. "The meetings will discuss the final-status issues and the vital daily-life issues," he said.

The talks aim at reaching a framework enabling the creation of a Palestinian statehood alongside Israel. Rice said that President Bush believes it was time to establish the Palestinian statehood and reaching the deal before he leaves the White House. However, President Abbas said that time was too short and they "race with time" to accomplish it. He admitted that after several months of negotiations, no single word has been written for the agreement.

As for the internal Palestinian issues, Abbas called on the Islamic Resistance Movement, or Hamas, to accept holding early presidential and parliamentary elections.

"We call on Hamas to step back from its coup, to accept the legitimacy and to immediately accept holding early presidential and parliamentary elections."

Hamas ousted pro-Abbas forces from Gaza Strip and took over the territory in June. The Islamic movement, which won legislative elections in January 2006, still rules the Gaza Strip and the group is neglecting a decree by Abbas firing its administration. "We stress that the Gaza Strip and the West Bank are a united geographical part," Abbas added. After sacking Hamas, Abbas formed a western-backed government based in the West Bank without having the confidence from the Hamas-dominated parliament. On Saturday evening, Rice arrived in Israel for a two-day official visit to promote the stalled negotiations between Israel and the PNA.

Israeli Foreign Minister Tzipi Livni indicated Israel may uproot some of its West Bank settlements as part of a peace accord with the Palestinians. Livni spoke at the start of a meeting with visiting U.S. Secretary of State Condoleezza Rice.

Palestinians have bitterly complained about recent Israeli moves to add housing units to West Bank settlements, even as negotiators for the two sides are working for a peace accord by year's end, as pledged at last November's Annapolis conference.

But at a joint press appearance with Rice as the Secretary neared the end of a two-day visit to the region, Livni noted that Israel dismantled its Gaza settlements in the disengagement of 2005, and said that settlements are no barrier to the broader peace process:" I would like to say clearly that while negotiating the final status issues - the borders and territory of a future Palestinian state, we showed especially in the disengagement plan from the Gaza strip that settlements are not an obstacle when it comes to - well it was not a peace process - but when there was a need for Israel to withdraw and to send a message of peace, we also dismantled the settlements," said Tzipi Livni.

Livni said the government of Prime Minister Ehud Olmert stopped building new settlements and confiscating land from Palestinians, and has no hidden agenda to effect a land grab before a peace accord is concluded.

In Ramallah, Rice heard harsh criticism of Israeli policy from Palestinian Authority President Mahmoud Abbas, who accuses Israel of undermining peace talks by settlement building and refusing to remove hundreds of security checkpoints in the West Bank.

Israel promised to remove 50 roadblocks during an earlier Rice visit in March, but Palestinians say many of those taken down were in remote places and their removal has not materially improved West Bank movement and access.

Rice told reporters she had raised the checkpoint issue earlier with Israeli Defense Minister Ehud Barak and that she is interested in not just the quantity, but also the quality, of Israeli steps to improve the everyday lives of Palestinians.

As to settlements, she said the United States opposes action by either side that would prejudge the outcome of negotiations:

"The United States continues to hold the view that settlement activity is contrary to Roadmap obligations, and continues to raise with the Israelis the importance of creating an atmosphere that is conducive to negotiations of the final-status agreement," said Condoleezza Rice. "And that means doing nothing certainly that would suggest there is any prejudicing of the final terms for final status negotiations."

The Secretary took part in two trilateral meetings with Israeli and Palestinian negotiators. But she has avoided comment on the substance of the peace talks and scrapped plans to brief State Department reporters. She scheduled a second meeting with Israeli Prime Minister Olmert before her scheduled departure for Washington. Olmert has become the subject of a police investigation on reported corruption charges, a development that could threaten the survival of his centrist coalition government.

Rice told reporters the probe is an internal matter for Israel. She said had a very good discussion with Mr. Olmert and expects the dialogue to continue as the drive for a peace accord in 2008 continues.

The Hamas Movement stated that the talk about progress in PA-Israeli negotiations is a new trick to mislead the Palestinian and international public opinion, adding that such rumors were issued at the request of US secretary of state Condoleezza Rice to serve as face saving for the American Administration.

In a press statement, Fawzi Barhoum, a Hamas spokesman, explained that this trick is used after the disclosure of the false promises made by US president George Bush to PA chief Mahmoud Abbas in Annapolis and during their last meeting.

Barhoum said that the talk about such progress is also aimed to cover up for the state of bankruptcy that afflicted Abbas and his negotiators after thirty negotiation sessions without being able to convince Israelis to remove one barrier hindering the movement of Palestinians in the West Bank.

For his part, Dr. Salah Al-Bardawil, the spokesman for the Hamas parliamentary bloc, considered the announcement of Abbas and his negotiating team about seriousness of the American party and progress in talks with Israel while there are still disagreements over core issues as some kind of spreading narcotic illusions to the Palestinian people to serve the Zio-American security and political interests.

In another context, Dr. Bardawil categorically denied the existence of any commitment by Hamas to unilateral truce and charged that Israel wants to weaken the Palestinian resistance through sporadic attacks in order to impose truce according to its conditions, pointing out that the resistance would not stay passive and would retaliate to the Israeli crimes.

In a related context, Dr. Ahmed Abu Halabia, the head of Al-Quds committee in the PLC, called on the PA chief and his negotiators to stop their useless negotiations with the Israel occupation especially the meetings held in occupied Jerusalem, the Palestinian city that is exposed to Zionist schemes of Judaization.

Dr. Abu Halabia appealed to international organizations and committees to assume their legal and ethical responsibilities towards the Palestinian people and to pressure the IOA to respect international agreements and to implement them in the occupied Palestinian areas.

The lawmaker also issued an urgent appeal to the Arab and Islamic governments and masses to move to stop the violations and arbitrary measures exercised by the IOA against the Palestinians in Jerusalem especially the withdrawal of Jerusalemite prisoners' IDs.

Israel's fraud squad questioned Prime Minister Ehud Olmert, who has been dogged by corruption scandals that surfaced after he took office in 2006, police said.

The investigators, led by National Fraud Squad Lieutenant chief Commander Shlomi Ayalon, arrived at Olmert's official residence in Jerusalem well before the announced time to avoid the throng of media gathered outside.

Public radio said the authorities had requested the hour-long interview following an important new development that emerged in recent days in investigations into corruption claims.

But the authorities would not say why Attorney General Menachem Mazuz took what local media said was the unusual step of permitting an "urgent" questioning under caution of Olmert.

The mass-circulation Yediot Ahronot reported that the authorities were examining new allegations that Olmert had received kickbacks before he assumed office.

The daily claimed the affair involved large sums of cash being given by a US businessman who is under investigation and who reportedly implicated Olmert when he was questioned during a recent trip to Israel. Olmert's spokesman said that the prime minister intended "to fully cooperate with law enforcement officials as he has in the past.

"He is convinced that once the truth is disclosed in the framework of the police investigation, the suspicions against him will disappear," Mark Regev said.

Olmert's former office manager, Shula Zaken, was also questioned recently in relation with corruption claims, Israeli media reported.

Opposition lawmakers called on Olmert to take temporary leave pending the conclusion of the investigations.

"Olmert is the most suspected PM in Israel's history," said Gideon Saar, chairman of the Likud faction.

The prime minister is already the subject of three police inquiries into suspected corruption.

The cases involve potential conflicts of interest, fraudulent property transactions and abuse of power in connection with political appointments.

In November, police said they did not have enough evidence to continue a months-long investigation into allegations of abuse of influence over the sale of the country's second largest bank.

The probe had focused on suspicions that Olmert, when acting finance minister in 2005 under former prime minister Ariel Sharon, tried to steer the sale of Bank Leumi towards a friend, Australian real estate baron Frank Lowey.

Bank Leumi was eventually sold to another company with no links to Lowey.

Olmert denies all of the allegations.

At this week's cabinet meeting, the premier declared his innocence, saying "the country is awash with rumors about the subject of the investigation...virtually all of which are malicious and wicked. I promise that when the issues are clarified...it will put a stop to these rumors." On Tuesday, prosecutors asked a Jerusalem court for permission to question a foreign national about the case. At a press conference afterward, State Prosecutor Moshe Lador said that "inaccurate information has been reported, and it is misleading the public."

Still, the urgency and timing of the police probe - on the eve of Independence Day events and next week's scheduled commemorative visits by President Bush, French President Nicolas Sarkozy, and other world leaders-indicate that law enforcement officials are going on something more than malicious rumors. For Olmert, this latest affair adds to his already dubious reputation as a law-abiding politician; four other police investigations are pending against him for allegedly abusing his political power to enrich himself and his associates.

While his standing in public opinion has been abysmal since he failed to deliver the promised victory over Hezbollah in the summer 2006 war in Lebanon, Olmert, 62, has survived in office because a combination of political cunning and the Knesset's hesitance to call new elections, which would doubtless result in many Knesset members being voted out of their jobs. However, the prime minister has ambitious rivals for his post, including Foreign Minister Tzipi Livni, Defense Minister Ehud Barak and opposition leader Binyamin Netanyahu, the clear favorite in the polls since the Lebanon war's demoralizing end.

If the suspicions against Olmert turn out to be substantive, he could be forced out by his own Kadima party and replaced by Livni, Kadima's No. 2. Or the Knesset might finally bow to public pressure and vote for new elections.

Or it could be none of the above; in his two years as premier, Olmert has defied expectations a few times by weathering political storms, most notably the wave of public contempt he faced after the war. No one is writing him off yet. By law, he would be required to leave office only if he were indicted.

While the latest development will do little to help his image, the prime minister has proved a survivor in the past, weathering allegations of wrongdoing, calls for his resignation, single-digit approval ratings and harsh criticism for his handling of the 2006 Lebanon war.

Olmert first assumed the premiership in January 2006, becoming Israel's 12th prime minister after taking over from Sharon who had designated him as his successor before falling into a coma.

Olmert was confirmed in the post after leading his Kadima party to election victory in March 2006.

Olmert has canceled the traditional prime minister's pre-Independence Day interviews with the major news media. As the country's leading newspaper columnist, Nahum Barnea of Yediot Ahronot, put it: "There are better ideas for a holiday gift than this."

Sources involved in the police investigation of Prime Minister Ehud Olmert, the details of which cannot be published due to a gag order, said it would be clear within a few days whether or not Olmert would be indicted on unspecified charges.

"Within days, it will be possible to determine whether it will be possible to file an indictment in the case against the prime minister," one of the sources said. "This is a quick investigation, relatively simple, and so far a large and significant amount of material has been gathered."

Olmert told the cabinet he would not let the police probe, which he said has sparked malicious rumors, prevent him from doing his job.

"When the facts become clear, they will lay the rumors to rest," he said in his first public comments on an affair that has threatened to further weaken him politically.

"In the meantime, I have an agenda as the prime minister of Israel," he said. "I intend to continue with this agenda and continue my job."

The police's national fraud unit questioned witnesses in the case, along with other suspects, such as Olmert's former bureau chief Shula Zaken, who was questioned for the third time in the past week. Zaken, who was questioned for about an hour, has so far refused to cooperate with police. She had been placed under house arrest, and the house arrest was extended until Friday. The investigators in the Tax Authority case recently said they had enough evidence to indict Zaken, and the prosecution is expected to decide shortly whether to charge her.

Zaken was suspended from her post as bureau chief a year ago, due to allegations she was involved in making improper appointments in the Israel Tax Authority. She recently began working with Olmert again, but not as bureau chief. Olmert has been questioned regarding the Tax Authority allegations against Zaken.

Meanwhile, the police and prosecution implied they planned to divulge some details of the case shortly.

Attorney General Menachem Mazuz, State Prosecutor Moshe Lador and the head of the police investigations unit, Yohanan Danino, released a statement last night saying they were aware of the public interest in revealing details of the case and would make an effort to get out additional information without hampering the investigation.

"Indeed, a situation in which a sitting prime minister is questioned under caution, without information being imparted to the public regarding the substance of the suspicions, not even in general terms, generates difficulty from the public and legal constitutional perspectives," the statement said. "It is understood that in light of the clear sensitivity and in light of the legal and public ramifications of the investigation, a special effort is being made by all those involved in the matter to hasten treatment of the matter as much as possible."

In the meantime, the gag order remains in place, though the Tel Aviv Magistrate's Court is due to hear a request from Haaretz tomorrow to limit or lift the gag order.

Police and Justice Ministry officials said the gag order was essential if the investigation were to move forward. "The good of the investigation comes before the public's right to know, and I know what I'm talking about," police chief David Cohen said, in his first public comment on the matter.

Once constant, the stream of immigrants to Israel is dwindling 60 years after the foundation of the Jewish state in 1948: In 2007, less than 20,000 people came to set up a new life in Israel, according to the country's central statistics office. Numbers have declined even further in the current year, with only 3,424 new immigrants in the first quarter - bringing immigration levels down to those of the time before the collapse of the Soviet Union in the 1990s.

At the time, the end of the communist bloc prompted an influx of almost one million people to Israel, mainly from the former Soviet Union.

"The number of people who leave Israel now approaches the number of immigrants," according to immigration ministry spokeswoman Meital Noy.

The ministry is now seeking out new target groups in order to counter the declining trend in immigration.

"We are coming home for Israel's 60th birthday", the latest campaign calls on Israelis abroad and on former immigrants who left Israel to return home.

Returnees are courted with enticements such as special offers for employment and health insurance deals, and Jewish doctors have been promised a bonus payment of 60,000 US dollars to immigrate to Israel in the anniversary year.

Up to 700,000 Israelis are currently living abroad, about 450,000 of them in the US, according to immigration ministry estimates.

Jewish immigration strikes powerful chords in Israel and it has both political and emotional significance. In Hebrew it is called "Aliya" - ascension. By contrast, Jews emigrating from Israel are called "Yordim" - those who descend from a better place.

They also used to be seen as traitors as emigration has always been perceived as a threat to Israel's continued existence.

Jewish immigration, especially from Eastern Europe, actually began long before the foundation of Israel in response to anti-Jewish pogroms and the growing strength of the Zionist movement in the late 1800s.

At the time, Palestine was still under Ottoman rule, which ended in 1917 when Britain assumed a mandate over the region which lasted up to independence.

Under the British mandate, immigrants initially came especially from Russia and Poland, and immigration took place in five large waves.

The last one between 1929 and 1939 brought almost 200,000 Jews, among them many who were fleeing from Nazi Germany to escape the Holocaust, in which ultimately more than 6 million Jews were killed. Responding to pressure from its Arab partners, Britain curtailed Jewish immigration to Israel from 1939 - a policy which increased the hardship of Jews trying to escape Nazi Germany, prompting many to try to reach Palestine illegally.

After Israel's foundation on May 14, 1948, however, the doors were finally open to Jewish immigrants who mostly came from European and Arab countries.

From Europe alone, about 600,000 - most of them survivors of the Holocaust - came between 1948 and 1970, and Israel's population rose from 657,000 to more than 3 million by 1973.

While Israel pursued its development with what is still recalled as a pioneer spirit, the foundation of the Jewish state signified a catastrophe for the Palestinians - more than 700,000 Arabs resident in Palestine lost their homes in the first Arab-Israeli war in 1948, either by expulsion or as refugees.

In Israel, meanwhile, each group of immigrants had to face prejudices and resentment against their individual ethnic backgrounds. The German "Yekkes" were regarded as tidy and punctual, but also as bullheaded and without a sense of humor.

By contrast, immigrants from Morocco were portrayed as uneducated and prone to violence. And for decades, Jews of North African and Middle Eastern origin - the Sephardim - complained about discrimination at the hands of what they perceived as the European Jewish elite, the Ashkenazim.

"Today, Jews are immigrating to Israel out of free will and for ideological rather than for economic reasons," said Noy.

"We have to do everything possible also in the future in order to continue to help Jews to come to Israel," she added.

Meanwhile, Israeli Foreign Minister Tzipi Livni met in London with her Turkish counterpart Ali Babacan from whom she received messages relayed by Syria.

This was the first meeting between Israeli and Turkish officials since Syrian President Bashar Assad's meeting with Turkish Prime Minister Recep Tayyip Erdogan, following reports that Ankara is mediating the talks between Tel Aviv and Damascus.

Friday's meeting was held as part of a donor nations' conference in England's capital to discuss aid to the Palestinian Authority. Livni also met with British Prime Minister Gordon Brown and was scheduled to meet with UN Secretary-General Ban Ki-moon and other British and Jordanian officials. The meeting began with the participation of the two foreign ministers' entourages, and was followed by a face-to-face meeting in which the two discussed the Syrian issue.

Babacan delivered to Livni messages relayed by Syria through his country.

The disagreement between the two countries derives from Israel's demand that Syria withdraw from the "Axis of evil," cut its military ties with Iran, stop funding Hamas and Hezbollah and prevent arms smuggling into Lebanon.

Assad, on his part, demands that Israel cede the entire Golan Heights and withdraw to the 1967 border.