Condoleezza Rice ended three days of talks with Israeli, Palestinian and Jordanian leaders saying Israeli-Palestinian negotiations are on track to produce a peace deal by the end of the year. Rice spoke at a news conference in Amman, Jordan with Palestinian President Mahmoud Abbas.

"I know that your teams have a lot of hard work ahead of them, but I have to say that I find very impressive the work that is being done and the seriousness of the process, and I think it is all moving in the right direction," she said. 

In one of her strongest comments on the issue, Rice also called for Israel to stop building settlements on land it seized in the 1967 Arab-Israeli War.

"As to settlement activity, we continue to state America's position that settlement activity should stop - that its expansion should stop," said Rice.

In his remarks, Mr. Abbas said he also fully expects to reach a peace agreement with Israel by the end of this year.

Mr. Abbas says he is optimistic about reaching a deal because of what he says is the personal involvement of President Bush in the process, and because Israeli and Palestinian negotiators are working extremely hard to deal with the core issues of the conflict. Mr. Abbas says he will meet with Israel's Prime Minister Ehud Olmert on April 7.

Earlier, Secretary Rice met with Israeli leaders and with the heads of the Israeli and Palestinian negotiating teams in Jerusalem. The Jerusalem municipality unveiled plans to build 600 new homes in a West Bank settlement on the outskirts of the city.

A key coalition partner in the government of Prime Minister Ehud Olmert, the religious Shas Party, also announced it had received approval from Mr. Olmert to build an additional 800 homes in an East Jerusalem neighborhood.

Following his talks with Secretary Rice, Mr. Olmert said that Israel will continue to build in East Jerusalem neighborhoods it intends to keep in an eventual peace deal with the Palestinians.

"The settlement issue is one of the core issues that are being negotiated as we speak here. This is one of the core issues to the conflict that is being negotiated. I would say the following; this government has done more than any previous Israeli government to bring under control settlement construction in the West Bank," said Mark Regev, Mr. Olmert's spokesman.

A report from the Israeli activist group Peace Now says Israel has approved the construction of 1,700 new homes in the West Bank since last November's Annapolis, Maryland Mideast Peace conference.

Meanwhile, Israeli military authorities dismantled a key checkpoint that restricted access to the West Bank city of Jericho.

On Sunday Israeli authorities pledged to take down about 50 roadblocks in the West Bank and ease restrictions for some Palestinians who need to pass through Israeli-controlled territory. In return Palestinians agreed to boost security measures to control militancy in the West Bank.