Clinton urges Israel settlement halt, no exception

WASHINGTON (Reuters) - The United States wants Israel to stop expanding Jewish settlements without exception, U.S. Secretary of State Hillary Clinton said on Wednesday, promising that Washington would push this point with its ally.

Palestinian and other Arab officials have long argued that Israel's expansion of settlements on land it occupied in the 1967 Middle East war undermine efforts to negotiate a peace agreement to end the six-decade conflict.

President Barack Obama, who has promised a fresh U.S. peace effort, said in a meeting on May 18 with Israel's Prime Minister Benjamin Netanyahu that "settlements have to be stopped in order for us to move forward."

"The president was very clear when Prime Minister Netanyahu was here. He wants to see a stop to settlements -- not some settlements, not outposts, not natural growth exceptions," Clinton said at a news conference with Egypt's foreign minister.

"We think it is in the best interests of the effort that we are engaged in that settlement expansion cease. That is our position, that is what we have communicated very clearly not only to the Israelis but to the Palestinians and others and we intend to press that point."

"Natural growth" is a term used by Israelis to describe construction inside existing settlements to meet the needs of growing settler families. Outposts are smaller settlements, often just a group of trailers inhabited by a few dozen people, that were built without Israeli government authorization.

Netanyahu has said natural growth will continue.

Palestinian President Mahmoud Abbas, who meets Clinton for dinner on Wednesday and sees Obama on Thursday, has ruled out restarting long-stalled peace talks until Israel halts all settlement activity.

The Palestinians say settlements, which the World Court has deemed illegal, could deny them a viable and contiguous state.

Half a million Jews live in more than 100 settlements Israel has built since its 1967 occupation of the West Bank and Arab East Jerusalem, territory in which close to 3 million Palestinians live.

Under the U.S.-backed 2003 "road map" peace plan, Israel is obliged to end all settlement activity, specifically including natural growth. The plan also obliged the Palestinian Authority to crack down on militants who seek to attack Israelis.

(Editing by John O'Callaghan)