FACTBOX: Main issues in U.S.-Israeli relations

JERUSALEM Tue Mar 3, 2009 2:08pm GMT

JERUSALEM (Reuters) - Secretary of State Hillary Clinton held her first talks with Israeli leaders on Tuesday since taking office, pledging to pursue a peace deal under which a Palestinian state would be created.

Following are main issues in U.S.-Israeli relations:

ISRAELI-PALESTINIAN CONFLICT

The administration of U.S. President Barack Obama is pushing for a two-state solution and would like to kick-start Palestinian statehood negotiations relaunched by the Bush administration in November 2007. Washington has taken a hard line on Hamas and is grappling with how to deal with the militant group if it joins a Palestinian unity government being mediated by Egypt. The Obama team also wants to take a regional approach to the conflict and is looking for a comprehensive peace deal.

The outgoing government of Israeli Prime Minister Ehud Olmert supported the U.S. vision of a Palestinian state. Prime Minister-designate Benjamin Netanyahu, head of the right-wing Likud party, advocates Palestinian self-rule but has been vague about creation of an independent state. He says any Palestinian state must have limited powers of sovereignty and no army. Israel opposes any dealings with Hamas.

IRAN

In a shift from the Bush administration, President Obama is actively seeking to engage Iran on a series of issues, from its nuclear program to Afghanistan. It is also looking to open up a low-level diplomatic office in Tehran but has made clear that any overtures to Iran will be accompanied by ramped up sanctions if there is no cooperation.

Israel has been cool to the idea of a U.S.-Iranian dialogue and has called for harsher sanctions against Iran. Israel has said all options are on the table in preventing a nuclear-armed Iran.

SYRIA

Washington is reviewing its ties with Syria and is looking into sending back a U.S. ambassador to Damascus after the previous one was recalled following the assassination in 2005 of former Lebanon prime minister Rafik al-Hariri. Anti-Syrian Lebanese politicians said Syria was behind the killing, a charge Damascus denies. The United States is also interested in exploring the "Syria track" as part of efforts to get a comprehensive Arab-Israeli peace.

Olmert has pursued indirect peace talks with Syria, which is seeking Israel's withdrawal from the occupied Golan Heights. Netanyahu says the Golan Heights are vital to Israel's security and the territory will remain in Israeli hands.

(Writing by Sue Pleming and Jeffrey Heller, Editing by Samia Nakhoul)