Rice spoke in the Canadian capital on Tuesday, a day after reports that a top Middle East envoy had criticised Israel for moving too slowly on negotiations to open borders around the Gaza Strip.


Israel withdrew troops and settlers from Gaza recently after nearly 30 years.


The territory, now under Palestinian control, is on the other side of Israel from the larger Palestinian-controlled areas of the West Bank, and Palestinians must cross Israel or go through Egypt to pass between the two areas.


"It is very clear that the crossings issues need to get resolved," Rice said.


Israel stalling


Rice did not specifically call on Israel to change its border policies, but did not dispute the findings of envoy James Wolfensohn that Israel was stalling in the restoration of movement across the borders.


"[Borders] need to get freed up so that the kind of economic programme we all want to see in the Palestinian territories [can begin]"

Condoleezza Rice,
US Secretary of State

Wolfensohn, the former World Bank president now working as a special envoy on behalf of the US and other foreign mediators, said the delay was preventing him from moving on to larger reconstruction efforts, such as tourism, agriculture and industrial projects.


Borders "need to get freed up so that the kind of economic programme we all want to see in the Palestinian territories" can begin, Rice said.


Wolfensohn is "simply asking the parties to do everything they can now that the Israelis are out of the Gaza to make sure that the Gaza is going to be a place where Palestinians can see a different kind of life and therefore start to build the foundations for a Palestinian state", she said.


Lost chance


In a letter to the UN secretary-general dated 17 October obtained by The Associated Press, Wolfensohn said Israel was behaving almost as if the withdrawal from the Gaza Strip never happened.


Israel closed the Rafah crossing
just before the Gaza withdrawal

Without dramatic progress soon, a rare chance to revive Gaza's shattered economy and the peace process will be lost, he said.


Israel closed the Rafah crossing into Egypt, Gaza's main link to the outside world, shortly before it withdrew from Gaza.


It has also severely restricted the passage of Palestinian labourers and goods in and out of Israel, the main Palestinian export market, since a wave of rocket attacks right after the pullout.


Israeli officials say the measures are solely because of security considerations.


Wolfensohn acknowledged such concerns but said Israel and the Palestinians should be able to quickly resolve differences over borders.