US Secretary of State Condoleezza Rice downplayed reports Wednesday that Iran had fired a new rocket into space, and stressed America's heightened profile in the region. "I don't think anybody is confused about the balance of power in the Gulf," she said in response to a reporter's question at a press briefing she held at the State Department. "The United States has had a period of enhancing the capabilities of our allies in the region," she noted, referring to new defense deals with Gulf states such as Saudi Arabia, as well as Israel. "The United States has increased its presence in the region." She also referred the emphasis the US has put on missile defense as "the best answer to some of these Iranian efforts." Rice, who will be ending her term in office along with the rest of the Bush administration on January 20, pointed to the Annapolis process seeking peace between Israelis and Palestinians as an issue that she will continue to focus on until then. "We continue to work on making certain that the pillars of Annapolis, including what is going on on the ground, are solid and strong and moving forward," she said. But she reiterated her earlier comments that the political transitions at hand made it difficult to complete a deal by the end of the year as the Annapolis process had originally envisioned. In addition to the American handover, Prime Minister Ehud Olmert heads a lame duck government until February elections and the formation of a government. Olmert, though, maintained after his meetings that a peace deal was close at hand. Asked about recent statements Israeli leaders, including President Shimon Peres, have made in support of the Arab peace plan, Rice added her backing. She said it offered "a kind of a broader framework in which one could understand what needs to be achieved in order to have broad peace in the Middle East, and not just the conclusion of a Palestinian-Israeli plan." The various parties were "talking about how it might be used," and "the Arab peace initiative is one of the elements mentioned in the Annapolis declaration," she said.