ROME, June 2: Israeli Prime Minister Ariel Sharon appears to believe Israel’s hold on the West Bank and Gaza Strip is unsustainable, US Secretary of State Colin Powell said on Monday, adding he was upbeat about Middle East peace efforts.

Mr Powell told reporters he expected positive statements to emerge from US President George Bush’s summit with Israeli and Palestinian leaders in Aqaba, Jordan, on Wednesday.

Mr Sharon, a champion of Jewish settlements in Palestinian areas, caused a stir last week when he said Israel could not keep Palestinians under “occupation”, although there was confusion over what he was precisely referring to.

Speaking at a joint news conference with Italian Foreign Minister Franco Frattini, Mr Powell said Sharon’s use of the word “occupation” was positive, although it could be interpreted in two ways.

“It was the first time we have heard him refer to an occupation of some kind — whether it’s just the presence of Israeli forces in Palestinian cities or whether it’s the occupation of territory,” Powell said, adding he would leave its interpretation up to Sharon.

“But I think it shows he recognizes that whichever interpretation you put on it, the occupation of particular cities or of territory is a situation that is unsustainable over time,” Mr Powell said. “It was a positive statement.”

A diplomatic source said Mr Sharon was to announce plans to uproot some rogue Jewish settler outposts at the Aqaba summit. Mr Powell would not say if he expected this to happen, but said the issue would come up in the talks.

“With respect to the outposts, I think it’s well understood that the outposts are not there properly and will have to be removed and I am sure that will also be an item of discussion in Aqaba,” Powell said.

Mr Powell said he was briefed by US Assistant Secretary of State William Burns, who is in the Middle East preparing for both summits, and that his report was encouraging.

“We expect that positive statements will be forthcoming but you know statement-writing always goes down to the last minute as people try to present one position or another, but the report he gave me last night was an encouraging one,” Powell said.

“I am still optimistic.”—Reuters