US still considers territories "occupied:

The Bush administration, playing down remarks made by Defense Secretary Donald Rumsfeld, made clear Wednesday that it still regards the West Bank and Gaza Strip as territories "occupied" by Israel.

The clarification came after Rumsfeld said Tuesday that the "so-called occupied territories" were captured by Israel in the 1967 Middle East war after neighboring countries, despite warnings, "got involved and lost a lot of real estate."

Rumsfeld also said that it would be difficult for Israel to transfer territory to the Palestinian Authority, which has been "involved in terrorist activities."

Yasser Abed Rabbo, the PA information minister, called Rumsfeld "a representative of the extreme right-wing of Likud."

US President George W. Bush has accused the Palestinian leadership of being compromised by terrorism.

But he has also agreed to try to help negotiate a Palestinian state on the West Bank and Gaza Strip over the next three years once a new responsible Palestinian leadership is elected and other reforms are made.

Daniel Kurtzer, the US ambassador to Israel, said yesterday that Rumsfeld was speaking only for himself and that his remarks did not signal a change in US policy.

"Secretary Rumsfeld made clear in what was a town meeting for Defense Department employees that he was speaking personally. He also made clear that the policy on this issue is made by President Bush. I think the president's June 24 speech speaks for itself and the secretary fully agrees with that," Kurtzer told Israel Television.

Asked how he refers to the West Bank and Gaza Strip, Kurtzer replied: "I use the language of the president of the United States. And he talked in his speech about the territories that were occupied in 1967."

Secretary of State Colin Powell first vowed to help put an end to Israeli "occupation" in a speech in Louisville, Kentucky, in November.

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