updated 6/16/2008 1:39:55 PM ET 2008-06-16T17:39:55

U.S. Secretary of State Condoleezza Rice and the Palestinian prime minister sat down for closed-door talks with Israel's defense minister Monday, a day after she harshly criticized new Israeli construction planned for disputed land.

Rice's joint meeting with Israeli Defense Minister Ehud Barak and Palestinian Prime Minister Salam Fayyad wrapped up a two-day peacemaking visit to the region.

The participants gave few details about the hour-long meeting, and after the talks, Rice departed for Lebanon.

In a short statement, Barak's office said the three discussed Palestinian police operations in the West Bank and Israeli support for Palestinian economic projects.

Barak also met separately with Rice, discussing "regional diplomatic and security issues," the statement said.

Reining in militants
Ahead of the meeting, Rice said Palestinian efforts to rein in militants would be on the agenda. She also praised measures taken so far by Fayyad's Western-backed government, although she acknowledged more needed to be done.

"I will say that some of the things that Prime Minister Fayyad has done on the terrorism side are ... pretty important," she said. "Going after terrorist finances is very important."

Palestinian police have recently deployed in the West Bank towns of Jenin and Nablus, both seen as militant hotbeds that have been run by armed gangs, in an effort to bolster the rule of law in the territory.

The Defense Ministry statement said, however, that Barak emphasized that Israel still retains ultimate security control of the West Bank.

The statement made no mention of Israeli settlement construction in the West Bank and east Jerusalem.

After Rice left, Palestinians fired two Grad rockets at the southern city of Ashkelon, seriously wounding an Israeli, the rescue service and a government official said.

Gaza's Hamas rulers took responsibility. In the past, Israel has charged that Iran has supplied Hamas with Grads, smuggled into Gaza under the border with Egypt.

The attack came as Egypt pressed ahead with efforts to arrange a truce to stop the daily Palestinian rocket barrages and Israel's reprisal attacks, but Israeli government spokesman Mark Regev said the Hamas goal is "to deliberately target innocent civilians." He added, "It appears today's attack is a deliberate attempt to undermine the Egypt initiative to achieve calm."

Later, Israeli forces killed a Palestinian in an attack on a rocket squad in Gaza, Palestinian hospital officials said. The Israeli military confirmed the strike.

Israeli settlement plan
On Monday morning, three Islamic Jihad militants were killed by Israeli fire while planting explosives along the Gaza-Israel border, according to Abu Ahmad, a spokesman for the group. The Israeli military confirmed that troops crossed into Gaza and shot the militants.

On the eve of Rice's arrival in Jerusalem Saturday, Israel announced plans to build another 1,300 new homes in east Jerusalem, where the Palestinians want to site their future capital.

The announcement brought to more than 3,000 the number of homes Israel has approved for construction in east Jerusalem and the West Bank since the renewal of peace talks with the Palestinians late last year.

On Sunday, Rice said the Israeli actions are having a "negative effect" on the atmosphere for talks, and she stressed the U.S. won't regard settlements built by Israel as permanent Israeli territory. Israel has said it is building only in areas it intends to keep as part of a final peace deal.

Over the year and a half that Rice has been making regular peace missions, there has been a pattern of provocative Israeli housing initiatives just before or just after her visits.

Although Israeli authorities say the construction announcements are not connected to the secretary's trips, Palestinians say the timing is clearly meant to placate hard-liners in Israel who oppose the West Bank land concessions that would be inevitable if the U.S.-sponsored peace process ever bore fruit.

The latest Rice visit, her fifth this year, generated little attention in Israel. While her visits were once front-page news, neither of Israel's two mass-circulation dailies carried stories on the subject Monday, and Prime Minister Ehud Olmert's office declined comment.

The lack of attention reflects growing sentiment that the lame-duck U.S. administration is running out of time to broker a peace agreement by a year-end target set by President Bush.

Israeli and Palestinian leaders have voiced doubts about meeting the target date, though they all say there is progress behind closed doors.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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