Jerusalem Israel declared the Palestinian-controlled Gaza Strip an "enemy entity" on Wednesday and said it would cut utilities to the territory. The move complicates a U.S. plan to relaunch peace talks aimed at establishing a separate Palestinian state in Gaza and the West Bank.
Israel made the provocative decision hours before Secretary of State Condoleezza Rice arrived for talks setting up what President Bush hopes will be a pivotal peace conference this fall. Rice neither endorsed nor criticized Israel's move.
Israel did not announce a date for cutting off services. The decision is likely to reinforce perceptions among Palestinians and their Arab backers that Israel will do as it sees fit regardless of the cost to civilians and that the U.S. will not block Israel.
Rice said the U.S. is trying to help both sides reach "common understanding." But she did not say whether the U.S.-sponsored peace meeting will address the hardest issues in the six-decade conflict, including the final borders of a Palestinian state.
The U.S. has not said exactly what it wants to achieve from the summit, nor who will attend.
Rice wants to recruit Arab states to reinforce the Palestinians in any deal with Israel, but the conference will carry little weight if regional players such as Saudi Arabia choose to sit it out. The meeting also has little chance of success if Israel is seen as unwilling to make hard concessions to the Palestinians and the U.S. is seen an unable to force Israel's hand.
The Gaza designation overshadowed any public talk of peace prospects as Rice began two days of meetings with Israeli and Palestinian leaders.
Israel did not inform the U.S. in advance of Wednesday's action, a U.S. diplomat said. Israel has been considering something similar for several weeks, however, to try to halt Palestinian rocket fire on Israeli towns from launching sites in Gaza.
The decision lets Israel cut electricity, water and other services that the impoverished, crowded coastal territory depends on Israel to provide.