Rice said Mideast peace talks going 'in right direction'

AMMAN, Jordan - Secretary of State Condoleezza Rice said Monday that Mideast peace talks are 'moving in the right direction,' although U.S. officials conceded it would be a hard slog to meet the goal of an Israeli-Palestinian deal in 2008.

Speaking after two days of talks in the region during which she wrung hard-fought but limited concessions from Israel to ease the economic isolation of Palestinians in the West Bank, Rice said more needed to be done, and singled out a halt to Israeli settlement as key.

Israel planning to build homes on contested land

JERUSALEM - Secretary of State Condoleezza Rice had barely left Israel on Monday after her latest peacekeeping mission when Israeli officials announced plans to build 1,400 new homes on land Palestinians claim for a future state.

Prime Minister Ehud Olmert vowed to keep building in east Jerusalem and the West Bank, dismissing Palestinian claims that construction on contested land is the greatest obstacle to peace.

Al-Sadr truce calms violence

BAGHDAD - Rockets fell on the Green Zone and random machine gun fire rang out Monday in the southern city of Basra as Shiite cleric Muqtada al-Sadr sought to rein in his militia after a week of battles that claimed about 400 lives.

The peace deal between al-Sadr and Iraqi government forces - said to have been brokered in Iran - calmed the violence but left the cleric's Mahdi Army intact and Iraq's U.S.-backed prime minister politically battered and humbled within his own Shiite power base.

Prime Minister Nouri al-Maliki had promised to crush the militias that have effectively ruled Basra for nearly three years. The U.S. military launched air strikes in the city to back the Iraqi effort.

Bush and Putin hope to resolve missle differences

KIEV, Ukraine - The White House raised hopes Monday of achieving a breakthrough agreement to resolve bitter differences with Moscow over missile defenses in Europe when President Bush meets with Russian President Vladimir Putin this weekend.

Bush's national security adviser, Stephen Hadley, said no deal was in hand yet but the two leaders could nail it down when they meet Sunday in the Black Sea resort of Sochi. 'We may. We're hopeful,' Hadley said. It'll be the last meeting between the two before Putin steps away from the Russian presidency.