The United States' top diplomat has concluded a peace mission to Israel and the Palestinian territories. But she has little to show for it, as we hear from Robert Berger at the VOA bureau in Jerusalem.

US Secretary of State Condoleezza Rice, reads a statement after her meeting with Lebanese PM Fuad Saniora in Beirut, 16 Jun 2008

Secretary of State Condoleezza Rice wound up her visit by hosting a trilateral meeting with the Israeli defense minister and Palestinian prime minister. But after two days of talks in Jerusalem and the West Bank there was no sign of progress in peace talks sponsored by the United States.

The headline of the visit was Rice's unusually harsh criticism of Israeli settlement expansion in disputed East Jerusalem and the West Bank. Rice did not speak to reporters before she left Israel. But on Sunday, she was clearly angry over Israeli plans to build 1,300 new homes in East Jerusalem, on land the Palestinians claim for their future capital.

"No party should be taking steps at this point that could prejudice the outcome of a negotiation, and I want to make very clear that the United States will not consider these activities to affect any final status negotiations including final borders; these are to be negotiated between the parties," she said.

Israel says it has the right to build anywhere in Jerusalem because it will remain the capital of the Jewish state in any final peace agreement.

Israeli spokesman Mark Regev says there are differences but not a crisis.

"Success isn't guaranteed. There are a lot of sensitive issues on the table, but I can say that we in Israel, and I believe the Palestinian leadership too, are committed to doing the work that needs to be done," said Regev.

Palestinian analyst Mahdi Abdel Hadi is less optimistic. He says settlement activity is eroding support for the peace process.

"Israel is controlling the land and this is creating more hate and more frustration, more anger among the Palestinians," said Hadi.

Disputes over settlements, Palestinian refugees and the status of Jerusalem have put further doubt on the U.S. goal of a peace agreement by the end of the year.