Bush says Israel settlement growth an "impediment"

By Matt Spetalnick

WASHINGTON (Reuters) - U.S. President George W. Bush on Thursday called Israeli settlement expansion an "impediment" to revived peace efforts in rare criticism of the Jewish state less than a week before his first presidential visit there.

In an interview with Reuters, Bush voiced optimism for securing an Israeli-Palestinian peace deal by the end of 2008, a goal set at November's Annapolis conference that has been viewed with widespread scepticism.

He also acknowledged that obstacles remained after decades of Middle East conflict.

Bush said he would use his trip to keep pressure on both sides, including making clear to Israelis his concern about Jewish settlement activity. Peace talks ahead of Bush's visit have been soured by disputes over continuing Jewish settlement construction on occupied land.

"I will talk about Israeli settlement expansion, about how that is, that can be, you know, an impediment to success," he said. "The unauthorized outposts for example need to be dismantled, like the Israelis said they would do."

Palestinian officials welcomed Bush's swipe at Israeli settlement building.

Asked about Bush's comments, Israeli government spokesman Mark Regev said: "Israel is committed to meeting all our obligations under the road map and if the Palestinian side moves similarly on its commitments, I believe there is a real chance for substantive progress in the coming months."

Talks launched at the U.S.-sponsored peace conference in Annapolis have bogged down since Israel announced plans to build hundreds of new homes in an area near Jerusalem known to Israelis as Har Homa and to Palestinians as Jabal Abu Ghneim.