Despite its support for Israel, the United States opposes expansion of Israeli settlements in the West Bank and has succeeded in reducing it, the U.S. ambassador to Israel told The Associated Press.

In an interview on Tuesday, Ambassador Richard Jones said that while Israel approves construction of some new settlement housing each year, Washington insists that Israel honor a pledge to freeze settlement activity made under the U.S.-backed 'road map' peace plan in 2003.

"I think that we have definitely slowed efforts at settlement-building," Jones said. "It's certainly true that some units are approved every year, a couple of hundred here or there, but I think the U.S.-Israeli understanding has definitely slowed down the process of settlements. We continue to make our views known through public statements and private discussions."

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In what the State Department called a violation of Israel's road map commitments, the Israeli Defense Ministry last week approved the building of a new settlement in the northern West Bank, where hundreds of former Gaza settlers are to be housed.

In a sanction against such activity, Washington routinely deducts from its annual aid to Israel a sum equal to the country's estimated settlement expenditure.

Some Israeli commentators have predicted a more critical U.S. stance toward Israel, with President George Bushhalfway through his second and final term in office and the recent midterm congressional elections putting his Democratic Party opponents back in control of both houses.

Jones said the bond between the two countries was firm.

We're never going to jeopardize Israeli security. That's an ironclad commitment, it's bipartisan," he said. "There's no doubt in my mind that the new Congress will be as four-square behind Israel and behind assistance to Israel and protecting Israeli security as it's always been."

Jones said that he was convinced Israel was committed to seeking movement toward a peace agreement with the Palestinians and welcomed last month's long-delayed first summit between Prime Minister Ehud Olmert and Palestinian Authority Chairman Mahmoud Abbas.

At that meeting, in Jerusalem, Olmert sought to give Abbas a boost by promising to ease West Bank travel restrictions and to give Abbas $100 million in Palestinians tax funds frozen by Israel when Hamas won control of the Palestinian government in an election a year ago.

"We were very pleased that the two leaders were able to meet. We think that that's a very positive sign. " Jones said. "The fact that they appeared to get along with one another, the fact that Prime Minister Olmert agreed to allow substantial tax revenues to be released for the benefit of the Palestinian people, all those things are very positive."

State Department spokesman Sean McCormack said last week that Bush was seeking funding "on the order of tens of millions of dollars" to bolster the security forces under Abbas' control with training and supply of non-lethal equipment.

Secretary of State Condoleezza Rice is to arrive in the region Friday and meet Israeli and Palestinian officials in an attempt to assess if conditions are ripe for a fresh diplomatic push for peace talks, a diplomat said Monday.

A bipartisan U.S. panel on Iraq headed by former Secretary of State James A. Baker III has said progress on the Israeli-Palestinian dispute could help ease tensions in Iraq, and British Prime Minister Tony Blair says a resolution to the conflict is key to Middle East stability. Israel disputes that conclusion.

Jones said Israeli-Palestinian peace would improve the regional atmosphere, but was not of itself key to calm in Iraq. "I definitely believe that resolution of the Israeli-Palestinian issues would be a huge plus for regional stability," he said. "Do I think it would end the insurgency in Iraq? No."