* U.S. urges Israel to conduct credible probes of war crimes
* Says confidence-building measure would boost peace process
* UN rights council debates Goldstone report on Gaza crimes
* Goldstone says MidEast impunity has reached "crisis point"
By Stephanie Nebehay
GENEVA, Sept 29 (Reuters) - The United States called on its close ally Israel on Tuesday to conduct credible investigations into allegations of war crimes committed by its forces in Gaza, saying it would help the Middle East peace process.
Michael Posner, U.S. Assistant Secretary of State, said that Hamas leaders also had a responsibility to investigate crimes and to end what he called its targeting of civilians and use of Palestinian civilians as human shields in the strip.
The U.N. Human Rights Council was holding a one-day debate on a recent report by Richard Goldstone, a South African jurist and former U.N. war crimes prosecutor.
His panel found the Israeli army and Palestinian militants committed war crimes and possibly crimes against humanity during their December-January war. Israel did not cooperate with the U.N. inquiry and has rejected the report as biased.
"We encourage Israel to utilise appropriate domestic (judicial) review and meaningful accountability mechanisms to investigate and follow-up on credible allegations," Posner said in a speech to the Geneva forum.
"If undertaken properly and fairly, these reviews can serve as important confidence-building measures that will support the larger essential objective which is a shared quest for justice and lasting peace," he said.
The United States joined the Council, set up three years ago, for the first time earlier this year.
Posner reiterated Washington's view that the Council paid "grossly disproportionate attention" to Israel, but said that the U.S. delegation was ready to engage in balanced debate.
Earlier, Goldstone said a lack of accountability for war crimes committed in the Middle East has reached "crisis point", undermining any hope for peace in the region. [ID:nLT514167]
"CULTURE OF IMPUNITY"
"A culture of impunity in the region has existed for too long," Goldstone told the Council.
"The lack of accountability for war crimes and possible war crimes against humanity has reached a crisis point; the ongoing lack of justice is undermining any hope for a successful peace process and reinforcing an environment that fosters violence."
Israel says its offensive was intended to stop militants firing rockets at Israel. Israeli human rights group B'Tselem says 773 of 1,387 Palestinians killed were civilians. Israel says 709 combatants and 295 civilians were killed. Thirteen Israelis, 10 soldiers and three civilians, died.
Goldstone's report urges the U.N. Security Council to refer the allegations to the International Criminal Court in the Hague if either Israeli or Palestinian authorities fail to investigate and prosecute those suspect of such crimes within six months.
"Our primary recommendation is that Israel and the authorities in Gaza should carry out good-faith, transparent investigations. International courts are courts of last resort, not first resort," he said on Tuesday.
Israel's ambassador Leshno Yaar rejected the report as "shameful" and "one-sided". It was "based on carefully-selected incidents, cherry picked for political effect".
Israel had opened more than 100 investigations, including damage inflicted on U.N. centres and medical facilities in Gaza, 23 of which had resulted in criminal proceedings, he said.
It faced "an enemy that intentionally deploys its forces in densely populated areas, stores its explosives in private homes and launches rockets from crowded school yards and mosques".
Ibrahim Khraishi, ambassador of the Palestinian delegation, urged the Council to adopt the report which he called objective.
"My people will not forgive the international community if the criminals are left without punishment," he said. (Editing by Ralph Boulton)