U.S Secretary of State Condoleezza Rice, said during a Saturday meeting with the Israeli Foreign Minister Tzipi Livni, that the aim of peace talks between Israel and the Palestinians should be establishing a Palestinian state living next to Israel.

Rice arrived in Israel on Saturday afternoon and met with the Israeli Defense Minister Amir Peretz and Avigdor Lieberman, the minister of the so-called “Strategic Threats”. 

Livni is expected to travel to Ramallah on Sunday for a meeting with the Palestinian President, Mahmoud Abbas.  In a press conference before her meeting with Rice, Livni stated that the “goal of any peace process is a two state solution, Rice agreed and said that the most Palestinians want to live in peace and security. 

Israeli officials said Livni and Rice had discussed the possibility of creating a Palestinian state with temporary borders following the line of a barrier Israel is building in and around the West Bank, Israeli online daily Haaretz reported.

Haaretz added that a senior Israeli official said Rice wanted to discuss some of the most sensitive issues, including the future of Jerusalem, with both sides "in order to see if there's space for progress on a Palestinian state in the next two years".

Moreover, Rice stated that she wants to discuss the issue of Iran, the Israeli-Palestinian conflict and the stated Road Map Plan. Recently, the Bush administration has asked the Congress to authorize $86 million in military aid to boost security forces loyal to Abbas, Haaretz added.

Responding to a question whether transferring aid to Abbas would increase tension between Fateh and Hamas, Rice said that Hamas, which the United States and the European Union list as a terrorist organization, is also armed.Haaretz also reported that Rice will be visiting Jordan, Egypt, Saudi Arabia, Kuwait, Germany and Britain.