"Establishing a Palestinian State is the "right thing to do," said U.S. Undersecretary of State Nicholas Burns.

"The time for a Palestinian state," said U.S. Secretary of State Condoleezza Rice, "is now."

"Israel should halt the settlements' expansion, and reduce its footprint in the West Bank," said Burns, the keynote speaker at the second annual gala of the American Task Force on Palestine in Washington Wednesday night.

"There is now a Palestinian government that we believe is a real partner for peace that truly has the interest of the Palestinian people and their hearts and their minds," said Burns.

Addressing a crowd of Palestinian Americans, Burns admitted that on a recent visit to the West Bank he recognized the "extraordinarily difficult conditions in the daily lives of the average Palestinians," caused by what he called "illegal outposts" established by Israeli settlers and numerous Israeli military roadblocks "all up and down the road between Jerusalem and Beit Hanina and to Ramallah."

"That's why we believe things have to change," said Burns.

The undersecretary reminded the audience of President George W. Bush's commitment to a two-state solution and the creation of a Palestinian state. Burns said that the Bush administration views the establishment of a Palestinian state to be not only in the interest of the Palestinians, the Israelis and the rest of the Middle East states, but the creation of a Palestinian state, said Burns, is primarily in the national interest of the United States.

"If there are hundreds of checkpoints and barriers and illegal outposts and settlements that sometimes grow, unfortunately, for the average people, the people who live there are all affected on a daily basis.

"Progress is being made," said Burns, referring to the talks between Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert, who have met five times since June.

"President Bush has made this one of the highest priorities of this administration," said Burns, referring to the peace talks between Israelis and Palestinians.

"Justice has to be done for all the people of the Middle East," said Burns, "the Palestinian people and the Israeli people and all the Arab states that surround those two."

Burns said that the Middle East peace summit which is expected to convene in Annapolis, Maryland in November, will be based on the framework of the Middle East Road Map for peace: "It will be based on the principle of land for peace," as well as United Nations' resolutions 242 and 338 and 1397.

Burns said it would be very important to have regional support particularly from the Arab countries. "We are not seeking a temporary peace, we are not seeking artificial peace, we are seeking a coming together of the peoples of the Middle East."

However, as U.S. Secretary of State Condoleezza Rice wraps up her latest Middle East tour Thursday, reports from the region seem to indicate that the peace conference might not happen after all, as both sides are unable to reach agreement over key issues such as the final status of Jerusalem and the right of return of Palestinian refugees.