Condoleezza Rice said on Sunday she still believed that Israel and the Palestinian Authority could reach a peace agreement by the end of the year, shrugging off concerns over the lack of progress in the negotiations.

On her latest trip to the Middle East, the US secretary of state offered more direct criticism of Israel’s policies in the occupied ­Palestinian territories than on previous visits. Speaking after her meeting with Mahmoud Abbas, the president of the Palestinian Authority, she described the continuing expansion of Jewish settlements in the West Bank as “particularly problematic to the atmosphere of trust that is needed”.