Secretary of State Condoleezza Rice said Friday a lack of democracy - she called it a "freedom deficit" - is the core problem in the Middle East.
Rice also said despite a divide between moderates and extremists in the area, she thinks the Bush administration "can begin to deliver" on its promise of a Palestinian state living in peace alongside Israel.
"No American president has ever dared to say it as a matter of policy," Rice said of President George W. Bush's declaration in 2002 that he supported creation of a Palestinian state.
At a joint news conference with visiting German Foreign Minister Franz-Walter Steinmeier, Rice made clear the administration would continue to focus on spreading democracy and steering clear of extremists while pursuing an Arab-Israeli settlement.
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