U.S. Secretary of State Condoleezza Rice has begun a two-day peace mission to the Middle East. As Robert Berger reports from VOA's Jerusalem bureau, her visit coincided with an unexpected Israeli announcement of a tightening of economic sanctions on the Gaza Strip.

U.S. Secretary of State Condoleezza Rice arrived in Jerusalem as Israel's Cabinet declared Gaza an "enemy entity." The decision, which came in response to Palestinian rocket attacks, means that Israel could restrict the flow of vital supplies to Gaza, including electricity, water and fuel. The aim is to pressure the ruling Islamic militant group Hamas in Gaza to halt the rocket attacks.

Rice was asked about the decision at a Jerusalem news conference.

"It's no secret that the United States declares Hamas a terrorist organization, and that we've been troubled by the fact that Hamas did what they did in the Gaza against the legitimate institutions of the Palestinian Authority," she said.

Rice was referring to the violent takeover of the Gaza Strip, three months ago, by the Islamic militant group, which routed the forces of the rival and more moderate Fatah faction, led by Western-backed President Mahmoud Abbas. 

Rice spoke after meeting with Israel's Foreign Minister Tzipi Livni, who said the new measures against Hamas are justified because Israel pulled out of Gaza two years ago.

"Even though we hoped that while taking our forces out of [the] Gaza Strip that this can be the beginning of the creation of a Palestinian state which I hope will live in peace with Israel, what we got in return are terror attacks, daily terror attacks, on Israeli citizens," Livni said.

Hamas described the Cabinet decision as a declaration of war, and said the Palestinian people would not bow to Israeli attempts to starve them into submission.

The feud overshadowed the original purpose of Rice's visit, getting Israel and the Abbas government in the West Bank to hammer out a joint document on Palestinian statehood. 

"We want to be as supportive as possible of this bilateral dialogue. We are hopeful that it can move forward to common understandings of a way forward to the creation of a Palestinian state so that two states can live side by side in peace and freedom," Rice said.

The gaps remain wide. Israel wants a vague declaration of principles on Palestinian statehood. The Palestinians want a binding agreement on core issues such as Jerusalem, refugees and final borders.