Mitchell, noting recent reports that the U.S. may be willing to compromise on settlement growth, continued to urge Israel to discontinue construction in settlements including those Israel claims are "natural growth." Mitchell indicated that these reports are "highly inaccurate" and that the American "position is clear. In 2003, Israel agreed to the Roadmap. It calls for a stop to settlements. We believe there should be a stop to settlements." Mitchell revealed that the U.S and Israel were "engaged in serious and intensive discussions" over the settlement issue.
In continued defiance of U.S officials, Israeli Foreign Minister Avigdor Lieberman (himself a settler) told Clinton that "we have no intention to change the demographic balance in Judea and Samaria [Israeli references to the West Bank]. Everywhere people are born, people die, and we cannot accept a vission of stopping completely the settlements. We have to keep the natural growth." Lieberman later indicated that Israel was "ready for direct negotiations with the Palestinians."
Clinton responded that a total settlement freeze was "important and essential" to finding a solution to the Israeli-Palestinian conflict. Roughly 500,000 Jewish Israelis now live in settlements west of the 1967 Green Line in the West Bank and East Jerusalem.
In a new development U.S. officials submitted a diplomatic note protesting Israel's closure of the Gaza Strip, demanding that Israel adopt a policy that allows the borders to be open more often to more goods to facilitate reconstruction after three weeks of fighting between Israeli soldiers and Hamas militants destroyed hundreds of homes, shops, and government buildings across the Strip. The American administration also indicated to Israel that it viewed linking the situation of abducted Israeli soldier Gilad Shalit (captured and being held by Hamas) and the opening of Gaza's borders as an obstacle to peace efforts.
The note, submitted three weeks ago, argued that strengthening the PA rather than Hamas would be achieved by relaxing restrictions on reconstruction efforts in the Gaza Strip. The Americans outlined four recommendations for Israeli policy toward Gaza:
1. Allow food and medicine into the territory. This process must be consistent and the types of food allowed into the territory known by all parties.
2. Allow Ramallah-based banks to transfer funds to Gaza banks.
3. Encourage economic growth by expanding the infrastructure for opening border crossings.
4. Relax restrictions on the import of cement and iron, materials badly needed for reconstruction.
The Obama administration, in return for the liberalization of Israel's Gaza policy, promised help in creating an international body to prevent building materials from being used by Hamas to build rockets or fortifications.