US Secretary of State, Condoleezza Rice, does not believe that the Israeli government is intentionally expanding settlements in the West Bank and believes that a peace deal with the PA is possible this year, media sources reported on Tuesday.

Israel accelerated the expansion of illegal West Bank settlements, deemed to be one of the primary obstacles to a Peace agreement.

In spite of this, Rice made a remark during a press conference with the Israeli Foreign Minister, Tzipi Livni, and sdad that she has faith in the Israeli intentions. "I don't believe that it is Israel's policy to increase activity in the settlements, rather it is to decrease activity", she stated.

Rice also stated that she considers settlements an obstacle to the peace process.

After meeting on Tuesday morning in Jerusalem, Rice and the Israeli Prime Minister Olmert released a joint statement claiming "progress" in negotiations with the Palestinian Authority.

Chief Palestinian negotiator, Ahmad Quria, announced last week that he does not expect an agreement this year between.

Olmert and the Palestinian President, Mahmoud Abbas, were expecting to achieve a peace deal by the end of this year, but they recently scaled down these expectations as the peace process is not actually advancing and no deal is anticipated soon.