"It was not a threat and not an implied threat," the senior official told Ynet.
On the eve of his visit to the Middle East, Mitchell hinted that his country could freeze support for loan guarantees if the Jewish state failed to advance peace talks with the Palestinians and a two-state solution.
Mitchell clarified in an interview to PBS' "Charlie Rose" show that the United States would use incentives or sanctions against both sides. According to American law, Mitchell said, the US can freeze its support for aid to Israel.
After the statement sparked a row, Washington sources clarified to Ynet that Senator Mitchell had no plan to threaten or imply that the US would use sanctions against Israel, but only to point to one option out of many that the American administration had in dealing with crises across the world.
'Focusing on encouraging sides'
"We are focusing on encouraging the sides – Israel and the Palestinians – to return to the negotiating table," the official said. "This will be at the focus of Senator Mitchell's visit to the region later this month."
Mitchell noted in the interview that all options must remain open and that the sides must be convinced about what their important interests are. He said some progress had been made and that his country would continue its efforts to resume the negotiations.
The US envoy also addressed the expected timetable, saying that "we think the negotiation should last no more than two years, once begun we think it can be done within that period of time. We hope the parties agree. Personally I think it can be done in a shorter period of time."
The American loan guarantees allow Israel to raise funds at low interest rates and improve the Jewish state's credit rating. The last time the US threatened to freeze the guarantees was during the term of President George Bush Sr. and former Prime Minister Yitzhak Shamir.