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25 Apr 2010 10:48 GMT | Politics, US & Canada, United States
The Palestinians are accusing Washington of killing all hope of reviving the peace process with the Israelis.
It comes after Hillary Clinton, the US secretary of state, signalled a U-turn on settlement building.
During a visit to Jerusalem, she told the Palestinians that the issue is not now a precondition for negotiations.
Jacky Rowland takes a look at the ramifications.
Source: Al Jazeera
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