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Condoleezza Rice held talks with Israeli and Palestinian Authority leaders.

The U.S. secretary of state flew to Israel late Saturday for final talks before President Bush visits to celebrate the Jewish state’s 60th Independence Day.

Rice met Israeli Prime Minister Ehud Olmert and Defense Minister Ehud Olmert before holding talks Sunday with P.A. President Mahmoud Abbas in Ramallah.

She said the Bush administration is still confident that an Israeli-Palestinian peace accord can be achieved by the end of the year, despite the lack of substance in talks between Olmert and Abbas.

While Rice noted that the Palestinian Authority has yet to meet its security obligations under the U.S.-sponsored peace “road map,” she called Israel’s settlements in the West Bank “particularly problematic to the atmosphere of trust that is needed.”

Rice was due to meet again with Olmert before leaving Monday.

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