In the face of Arab criticism of the administration's recalibrated Mideast peace tack, US Secretary of State Hillary Rodham Clinton moderated her praise for Israel's offer to restrain building settlements in Palestinian areas.

While Israel was moving in the right direction in its offer to restrict but not stop the settlements, Clinton said Monday, its offer "falls far short" of US expectations. She repeated, however, that it reflected a potentially important step forward for Mideast peace.

Clinton said her earlier praise of Israel's offer, during a stop in Jerusalem, had been intended as "positive reinforcement." But her comment drew widespread criticism from Arab countries which interpreted it as a softening of the US position on settlements, which stand in the way of a resumption of Israeli-Palestinian peace talks.

In a sign of US eagerness to calm Arab concerns about the US

position on settlements, Clinton is extending her trip by one day to fly to Cairo to meet with President Hosni Mubarak on Wednesday, her staff announced. She had been scheduled to return to Washington on Tuesday.

Clinton's comments in Jerusalem on Saturday appeared to reflect a realization within the Obama administration that Israeli Prime Minister Benjamin Netanyahu's government will not accept a full-scale settlement freeze and that a partial halt may be the best lesser option. Her appeal on Saturday seemed designed to make the Israeli position more palatable to the Palestinians and Arab states.

"We have to work with what we've got," said one US official, adding: "We need to press both sides not to miss this opportunity."

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