Rice will step into the limelight with her new job
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The incoming US secretary of state has said trying to solve the Middle East conflict will be a core goal during her term as America's top diplomat.
Condoleezza Rice told US senators at a confirmation hearing that this was a critical "moment of opportunity".
"I don't think we can afford to miss this opportunity if the parties themselves are willing to take advantage of it," Ms Rice said.
She said she drew great encouragement from the recent Palestinian elections.
But she said newly elected Palestinian leader Mahmoud Abbas needed to do more to end militant attacks against Israel to keep hopes of peace alive.
"America seeks justice and dignity and a viable, independent and democratic state for the Palestinian people," she told the lawmakers.
But she added: "There can be no permanent peace without an end to terror."
Active engagement
Ms Rice did not mention the international peace plan known as the roadmap in her opening remarks.
But she pledged "very active engagement" without offering any new proposals for ending the conflict.
She also said Israel should work to "improve conditions under which Palestinians live", and Arab states should participate by not harbouring violent groups.
US President George W Bush nominated Ms Rice to replace outgoing Secretary of State Colin Powell after winning a second term of office.
The Israeli-Palestinian conflict has cost about 3,600 Palestinian and 1,000 Israeli lives in the last four years. It centres on the fate of the West Bank and Gaza Strip - home to about three million Palestinians - which Israel has occupied since 1967.