Rice, on the second day of a Middle East tour, is to see Israeli Prime Minister Ariel Sharon as well as Foreign Minister Silvan Shalom and top army and intelligence officials on Sunday, a day after conferring with the Palestinians.

The chief US diplomat arrived in the region at President George Bush's behest, bringing a message that time was running short to finalize arrangements for the Israeli withdrawal from Gaza and parts of the West Bank.

Warning on settlements

Before she landed here, Rice had issued a warning on Saturday to Israel not to compromise the peace process by continued expansion of settlements.

Officials said she had used a dinner meeting on Saturday night with Defence Minister Shaul Mofaz to press Israel to take new steps to improve the lives of Palestinians and release more prisoners to keep up the goodwill in peace efforts.

Rice said PresidentAbbas had
taken some concrete steps

Rice told reporters in the West Bank town of Ram Allah on Saturday that both sides must come to terms on thorny issues related to the Gaza pullout, such as border control, freedom of movement, distribution of assets and security roles.

"There is no more time to simply put problems on the agenda," she told a joint news conference with Palestinian President Mahmoud Abbas. "This now has to be an active process of resolving these (issues)."

"Both parties will have to do their part if this is to be a peaceful and orderly withdrawal from the Gaza. So this coordination function is absolutely critical."

Rice reported no headway on any of the fronts and renewed her concerns over progress by the Palestinians in reforming their security services and cracking down on violence by militants.

She said Abbas had taken some "good concrete steps" but "much more needs to be done, particularly to use actively the security forces to combat lawlessness and to combat terrorism."

Hamas

Rice said Washington would continue to boycott the resistance group Hamas, which has carried out a number of anti-Israeli attacks, but looks set for a strong showing in the next legislative elections.

Demonstrators called for the
release of
Palestinian prisoners

"The United States has no contacts with Hamas because the United States believes Hamas is a terrorist organisation," she said. "There is an elected (Palestinian) president... and that's whom we'll deal with."

Hamas condemned Rice's comments, arguing it was a legitimate Palestinian political force.

"The United States wants to continue to portray Hamas as terrorists although Hamas is participating in elections and has won the local elections," spokesman Sami Abu Zuhri told AFP.

Abbas said the Palestinians were committed to maintaining a ceasefire and coordinating the Gaza withdrawal, but complained of Israel's settlement activity and construction of a security barrier.

"This is a huge problem not only for the truce, but for the entire peace process," he told the news conference.

Road map

Abbas and his aides urged Rice to help resolve issues involved in the pullout, including borders, safe passage between Gaza and the West Bank and a closed airport in southern Gaza.

"We told her that if there are no answers to these issues, the withdrawal from Gaza and the northern West Bank will be a failure," a senior Palestinian official told AFP.

The exchanges highlighted the work facing the Israelis, Palestinians and Americans as they try to pull off a troop withdrawal that could reinvigorate efforts to apply a broader "road map" for ending nearly five years of conflict.

Rice brought into the talks General William Ward, her top security adviser in the conflict, and former World Bank chairman James Wolfensohn, point man on reconstruction.

Palestinian officials quoted her as saying she would make additional trips to the region before the withdrawal. But a senior US official said: "I'm not going to rule it out, but I'm not going to commit to it."