WASHINGTON – US Secretary of State Hillary Clinton seemed to push back Wednesday night against Palestinian efforts to unilaterally declare a state, stressing that direct negotiations are the only way to move forward.

“There is no substitute for face-to-face discussion and, ultimately, for an agreement that leads to a just and lasting peace,” Clinton told the American Task Force for Palestine at its annual gala dinner. “That is the only path that will lead to the fulfillment of the Palestinian national aspirations and the necessary outcome of two states for two peoples.”

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Her comments came as Palestinian and Arab leaders have increasingly suggested they might try to get the UN to sanction a unilateral declaration of statehood. Such talk has picked up since negotiations between Israelis and Palestinians have stalled, with Palestinians refusing to continue discussions once Israel let a freeze on settlements expire on September 26.

Clinton acknowledged having hit a snag, noting that “it’s no secret that we are in a difficult period.”

But she said the US remained committed to the process despite the obstacles and that US Middle East envoy George Mitchell would return to the region soon.

“I cannot stand here tonight and tell you there is some magic formula that I have discovered that will break through the current impasse,” she said. “But I can tell you we are working every day, sometimes every hour, to create the conditions for negotiations to continue and succeed.”

Clinton continued to express faith in Palestinian Authority President Mahmoud Abbas and Prime Minister Binyamin Netanyahu, describing them as “serious about this effort” and declaring, “I am convinced they want to the leaders who finally end this conflict.”

Still, she urged all the parties to do more.

“We still need many more steps from Israel to enable more economic activity in Gaza, including exports that bolster legitimate business enterprises,” she said to applause.

She began her remarks with a “strong condemnation” of the alleged arsonists who burned down a school warehouse near Nablus on Wednesday and called for a “swift investigation.”

Many believe that Israeli settlers were behind the attack.

Clinton only mentioned settlements briefly, however, using softer language than she and other US officials have in the past when she simply stating that “our position on settlements is well-known and has not changed.”

Clinton also called on Arab states to do more to support the Palestinians, saying that the PA needs “a larger, steadier, and more predictable source of financial support.”

She also called on Arab countries to begin to work to implement the Arab Peace Initiative.

When it came to the Palestinians, Clinton repeated a US call for dealing with incitement, telling the audience, “Palestinians could do more to discourage and denounce incitement that inflames tensions and undermines cooperation.”

Israel has growing concerns about Palestinian initiatives to declare unilateral statehood and how that might undercut peace talks and worsen Israel’s position. Members of the American Jewish community have also expressed their hope that the administration would speaking out strongly against such a move.

Ambassador to the US Michael Oren on Tuesday declared that Israel wouldn’t be swayed by such efforts. Speaking at the US Chamber of Commerce, he maintained, “Netanyahu will not allow the UN or any other organization to dictate our borders. Our borders will only be established through direct negotiations with the Palestinians and our other Arab neighbors.”

While Clinton’s comments weren’t explicit, they seemed to make clear that the US does not look favorably on unilateral moves such as going to the UN.

“Negotiations are not easy, but they too are absolutely necessary. It is always easier to defer decisions than it is to make them,” she said, rejecting the notion that it’s “viable to build the institutions of a future state without the negotiations that will ultimately create it.”

Scott Lasensky, a US Institute of Peace Middle East expert who attended Wednesday’s gala dinner, said Clinton’s comments carried an implied warning.

“It was a polite way of saying that for the United States, the negotiating track is the only way forward,” he explained.

Oren himself was also in attendance Wednesday, the first time an Israeli ambassador has participated in the event, according to ATFP organizers. In addition, many representatives from the American Israel Public Affairs Committee, the Israel Project, the American Jewish Committee and other pro-Israel groups participated.

At several points in Clinton’s address, statements she made supporting Israel were greeted with applause, including her declaration that IDF soldier Gilad Schalit, captured in 2006 by Hamas-allied gunmen near Gaza, “must be released immediately and returned to his family” and that “being pro-Palestinian does not mean you must reject Israel’s right to exist.”

She continued on to say that “being pro- Israel does not mean you must deny the legitimate aspirations of the Palestinian people,” which similarly received cheers.

Clinton also decried the “indignity of occupation” and spoke personally of seeing the difficult situation of Palestinians living in the West Bank under Israeli military control while on a recent official trip.

“As I looked at the faces of the men and women who came out of their shops and homes to watch us go by, it was impossible to forget the painful history of a people who have never had a state of their own,” she said. “For most Americans, it is hard, if not impossible, to imagine living behind checkpoints and roadblocks, without the comforts of peace or the confidence of self-determination.”

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