Rice criticises Israel over settlement programme

US Secretary of State Condoleezza Rice criticised Israeli settlement activity in exceptionally harsh language yesterday, saying new construction projects on disputed land has a “negative effect” on Mideast peace talks.

Rice made the comments during her latest attempt to prod Israelis and Palestinians toward a final peace deal by the end of the year, a goal she said is ambitious but within reach.

After a meeting with Palestinian President Mahmoud Abbas, Rice said the US remains committed to the target date. But she said Israeli plans to build thousands of homes in the West Bank and east Jerusalem raises questions about Israel’s motives and harms the atmosphere of good faith for talks.

The Israeli leader’s office declined to comment.

Speaking to US reporters in Jerusalem later in the day, Rice said she had not witnessed a change in Israel’s position on settlement activity.

On another issue of friction between the United States and its closest Mideast ally, Rice said she sees no reason why Israel has not yet approved travel papers for Palestinian students from the Gaza Strip who won prestigious Fulbright scholarships for study in the US.

Three of the seven scholarship winners have been held up over unspecified security concerns.

The students had been told by US diplomats that they could not use their fellowships this year because Israel did not approve travel papers.

Meanwhile, Prime Minister Ehud Olmert has concluded that Israel should swap the perpetrator of a notorious guerrilla attack for two Israeli soldiers held in Lebanon since 2006, a senior government official confirmed yesterday.

The official’s comments buttressed recent signals from Israel and the Lebanese Hezbollah guerrilla group that a deal was in the works to trade Samir Kantar, a Lebanese PLO operative, for Israeli soldiers Uri Goldwasser and Eldad Regev.