US Secretary of State Hillary Rodham Clinton said Washington does not accept the legitimacy of Israeli settlements in the West Bank and wants to see their construction halted "forever."
Still, Clinton said an Israeli offer to restrain - but not halt - settlement building represents "positive movement forward."
Clinton spoke after talks Wednesday with Egyptian President Hosni Mubarak during a hastily arranged stopover in Cairo. She came to soothe Arab concerns that Washington is backing off demands for an Israeli settlement halt, sparked when she praised the Israeli plan in Jerusalem on Saturday.
She has since said Israel's stance does not go far enough, but has hinted the Palestinians should resume negotiations without a full settlement halt.