Rice says need to keep focus on Palestinian state

RAMALLAH, July 25 (Reuters) US Secretary of State Condoleezza Rice said today there was a need to remain focused on establishing a Palestinian state alongside Israel despite the crisis in Lebanon.

Rice met Palestinian President Mahmoud Abbas after visiting Lebanon and Israel, where she discussed the two weeks of fighting with Hizbollah guerrillas that have opened up a second front for Israel, already fighting in Gaza for a month.

''Even as the Lebanon situation is resolved, we must remain focused on what is happening here, in the Palestinian territories,'' Rice told a news conference.

''On our desires to get back to ... (the) vision of two states living side by side in peace.'' Israeli-Palestinian relations hit a new low last month when gunmen from the Gaza Strip, including militants from the governing Hamas Islamist movement, killed two soldiers in Israel and abducted a third.

That prompted an Israeli offensive which has left 121 Palestinians dead, but failed to secure the soldier's release or halt rocket fire by militants. The fighting in Gaza has been overshadowed by the war in Lebanon.

A senior Palestinian official said Rice had told Abbas, a moderate, that Washington wanted to see a change in the Hamas government, which is under a US-led aid embargo to force it to recognise Israel, renounce violence and accept peace deals.

She also told Abbas to use his authority to restore calm so that a political settlement to the Israeli-Palestinian conflict could be discussed when the Lebanon crisis is over.

THREAT ''If the Palestinians don't change the government and don't achieve calm, the Palestinians will be ignored,'' the official said.

There was no immediate US comment.

Abbas, who has been struggling to salvage peacemaking amid resistance from Hamas, voiced hope that the Israeli soldier would be returned by the militants and Israel would be prompted to release Palestinian prisoners.

''We ... will exert maximum effort to revive the peace process and to guarantee the release of the soldier,'' he said.

''We hope that Israel will realise the suffering of 10,000 Palestinian families whose sons and daughters are in Israeli jails.'' Israel, which abandoned Gaza in 2005 after a 38 years of occupation, has ruled out any prisoner swap, although Germany, which helped negotiate an exchange of prisoners in 2004, said yesterday it was hopeful for the release of the soldier.

A Palestinian official said Abbas told Rice that a more fanatical group might emerge in Lebanon if Hizbollah is cowed, noting that when Israel pushed out Palestinian guerrillas from Lebanon in the 1980s they were replaced by Hizbollah.

Palestinian Prime Minister Ismail Haniyeh of Hamas dismissed calls by Rice for a ''new West Asia'' of peace and democracy.

''It seems that the new West Asia from the American perspective begins with the destruction of Lebanon and by killing the biggest number of Palestinians,'' Haniyeh said.

REUTERS MQA ND2252