US Secretary of State Condoleezza Rice called on Monday for a halt to Israeli settlement building after the Jerusalem municipality said it planned to build 600 new housing units.
"We continue to state America's position that settlement activity should stop, that its expansion should stop – that is indeed not consistent with Road Map obligations," Rice said at a press conference in Amman, Jordan with Palestinian President Mahmoud Abbas.
The US secretary of state also said that Israeli-Palestinian peace talks were on the right track and she believed a deal was still possible by year's end.
"I have to say I find very impressive the work that is being done and the seriousness of the process and I think it's all moving in the right direction," Rice added.
Commenting on US hopes for an agreement before US President George W. Bush leaves office in January, she said. "I fully believe that it is a goal that we can reach."
Abbas likewise expressed confidence despite differences with Israel over what the outcome of the negotiations should be.
"I am confident, God willing, we will reach a comprehensive peace in 2008. We, the Israelis and the Americans and all the concerned parties in the region, are working to achieve this," Abbas said.
Israeli officials say the goal of the talks was to reach understandings setting out the shape and structure of a future Palestinian state rather than a comprehensive peace agreement this year that would be implemented.