() – A senior U.S. Middle East diplomat said on Monday Israel “must stop” building settlements and told Palestinian leaders to rein in militant attacks to revive a U.S.-backed peace plan based on two states.

David Satterfield, deputy assistant secretary of state for Near Eastern affairs, said Israel should also rethink the barrier it is building in the West Bank following threats from both sides that could sink the “road map” plan.

The diplomat put more emphasis on concessions from Israel than top U.S. officials — including Secretary of State Colin Powell — have in recent weeks.

“For friends of Israel, the conclusion is hard to escape, settlement activity must stop because it ultimately undermines Israeli as well as Palestinian interests,” Satterfield said in a speech to a conference on the Arab-Israeli War in 1967.

The barrier’s route was also “a significant problem… and, like settlement activity itself, takes everyone further from the comfort and trust necessary to achieve the (U.S.) president’s vision of two states,” Satterfield said.

While he was reiterating U.S. policy, the public comments were meant to pressure Israel, whose biggest ally is the United States, analyst Richard Fairbanks of the think-tank, the Center for Strategic and International Studies, said.

“The fact he said it out loud is important because it is sending a signal,” Fairbanks said.

Suicide Bombers

Israel has threatened a unilateral separation along the line of a wall snaking through the West Bank that it says is to keep out suicide bombers. Palestinians call it a bid to annex or fragment occupied land and have warned they could respond by demanding a single bi-national state.

Satterfield, who was in Jerusalem in December to mediate.

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