US Secretary of State Hillary Clinton was confident of the prospects for Palestinians and Israels to achieve a final peace agreement during a speech covering a wide range of foreign policy issues at gathering at the Council on Foreign Relations held in Washington on Wednesday.

"Both sides and both leaders recognize that there may not ever be another chance," said Clinton.  She added, "There's a certain momentum. You know, we have some challenges in the early going that we have to get over, but I think that we have a real shot here."

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Clinton asserted at the meeting that the Obama administration's approach to foreign policy was beginning to pay important dividends.

"We are advancing America's interests and making progress on some of our most pressing challenges." "Today we can say with confidence that this model of American leadership works, and that it offers our best hope in a dangerous world."

Despite Clinton's optimistic remarks on Wednesday, progress in the area of American-guided Israeli-Palestinian peace talks seemed to be in question.

Earlier in the day, a member of the Palestinian Authority negotiating team participating in the peace talks announced that the PA does not intend to recognize Israel as a Jewish state.



"The Palestinian Authority will never recognize Israel as the Jewish state because such a declaration will negate the right of the Palestinian refugees to return to their home," said Nabil Sha'ath in Ramallah on Wednesday.

Sha'ath clarified that "the PA is not opposed to the fact that there will be a Jewish majority in Israel," but that the PA had rejected Prime Minister Binyamin Netanyahu's request to discuss the recognition of Israel as the Jewish state at the talks schedule to occur in Sharm e-Sheikh.

He also reiterated the PA position that if Israel permitted the continuation of building in its West Bank settlement after the expiration of the government's building freeze the PA would walk out of the peace talks. "If Israel goes back to settlements, we will not stay in the negotiations," Sha'ath said.

Associated Press contributed to this report.

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