US State Sec Condoleezza Rice urges Israel not to undermine peace efforts with the Palestinians after a report found it had almost doubled its settlement building in the West Bank this year. Ms Rice, who is visiting Israel and the PA in a bid to spur progress in the faltering peace talks, said:

I think it's no secret, and I have said it to my Israeli counterparts, that I don't think that settlement activity is helpful". Ms Rice is on her seventh visit to Jerusalem and Ramallah since the US-backed Annapolis conference in November, which renewed Israeli-Palestinian negotiations. Peace Now, a group that tracks settlement activity, cited figures from the central bureau of statistics as showing that Israel's housing ministry began work on 433 new housing units between January and May this year, compared to 240 units in the same period in 2007. The group also reported that the number of tenders published for future construction in settlements in the West Bank and in East Jerusalem soared in the period. Israel's settlement expansion, illegal under international law, has stoked tensions with the Palestinians and has hampered US-led efforts to reach a peace deal by the end of this year. The uncertainty surrounding Israel's political leadership has also been an obstacle to talks. Ehud Olmert, PM, who is the subject of a corruption investigation, announced last month that he plans to step down in mid-September. Despite the scepticism voiced by senior Israeli and Palestinian officials about reaching a peace pact by January, Ms Rice said on Aug 26 that the positions of the two sides in the secret talks have shifted "somewhat closer together". Ms Rice has repeatedly pressed Israel to halt construction in the West Bank and East Jerusalem, areas Israel occupied during the 1967 war and which the Palestinians see as part of their future state. Olmert, however, has said Israel will continue building in Jewish neighborhoods of Jerusalem and in settlement blocs that it plans to keep under any peace agreement. Ms Livni, speaking at a briefing with Ms Rice, insisted that Israel's settlement activity should not influence the peace process. She said: The role of the leaders is to try to find a way to live in peace in the future and not to let any kind of noises that relate to the situation on the ground these days to enter the negotiation room". Ms Livni, seen as a favorite to succeed Olmert as PM, added that settlement construction has been "reduced in the most dramatic way", especially on the eastern side of the barrier Israel is building in and along the West Bank. According to Peace Now, Israel's continuing construction is intended to create territorial contiguity between the large settlement blocs and the more distant Jewish communities in the heart of the West Bank.