* Clinton says talks "absolutely necessary" for peace
* Acknowledges "we're in a difficult position"
* Urges Arab countries to boost funding for Palestinians
By Andrew Quinn
WASHINGTON (Reuters) - U.S. Secretary of State
Hillary Clinton warned Israel and the Palestinians Wednesday
there was no "magic formula" to break an impasse over peace
talks, but said hard work could still yield a deal.
Clinton, speaking to a Palestinian advocacy group that
supports a peaceful end to the conflict, said both Prime
Minister Benjamin Netanyahu and Palestinian President Mahmoud
Abbas remained committed to a two-state solution despite a
standoff that threatens to torpedo the U.S.-brokered peace
talks less than two months after they were launched.
"Negotiations are not easy, but they are absolutely
necessary. It is always easier to defer decisions than it is to
make them," Clinton said at a banquet hosted by the American
Task Force on Palestine.
"I cannot stand here today and tell you there is a magic
formula that I have discovered that will break through the
current impasse. But we are working every day to create the
conditions for negotiations to continue and succeed."
Direct U.S.-brokered peace negotiations began on Sept. 2,
but the Palestinians suspended the talks after a 10-month
Israeli moratorium on housing starts in Jewish settlements in
the occupied West Bank expired on Sept. 26.
Palestinians fear settlements will deny them a viable and
contiguous state. Netanyahu, who shrugged off repeated U.S.
calls to extend the ban, says their future should be decided at
the negotiating table and not serve as a condition for talks.
The cloudy prospects for direct talks represent a challenge
for President Barack Obama, who has staked considerable
political capital on the peace process and has said he believes
the two sides can reach a deal within a year.
But both sides appear to be digging in before U.S.
congressional elections on Nov. 2. Israeli ministers in
particular expect that if Obama's Democrats sustain heavy
losses as predicted, he may be less eager to force a showdown
with Israel and its influential supporters for fears of further
undermining his political position.
Clinton said George Mitchell, the Obama administration's
special envoy, would return to the region soon.
FOCUS ON THE FUTURE
Repeating messages she has given to Israel, Clinton told
the Palestinian group to focus on what could be gained through
negotiation, not what might be sacrificed.
"I know there are those who think that if they wait, scheme
or fight long enough, they can avoid compromising or
negotiating. But I am here to say that that is not the case.
That will only guarantee more suffering, more sorrow, and more
victims," she said.
Clinton said Israel should do more to relax its economic
blockade on the Gaza Strip, which is controlled by the Islamist
Hamas, but said states should also publicly disavow Hamas and
Lebanon's Hezbollah, sworn enemies of Israel which enjoy strong
support from both Syria and Iran.
She praised Abbas' efforts to build the framework for
future Palestinian statehood, saying improved governance was
creating an environment for more growth and investment. But she
said the fledgling state would need more support particularly
from the Arab world, which has lagged behind both the United
States and the European Union in financing.
"It takes more than words to support making the State of
Palestine a reality," she said.
(Editing by Doina Chiacu)
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