US Permanent Representative to the United Nations, Ambassador Susan E. Rice said on Monday that the US "does not accept the legitimacy of Israeli settlement activity, and will continue to oppose any efforts to legalize outposts."Speaking at the Security Council Open Debate on the Middle East, Rice emphasized: "The fate of existing settlements must be dealt with by the parties along with other permanent-status issues."Referring to anti-Palestinian violence and desecration of religious sites, Rice added: "Israel should step up its efforts to deter, confront, and prosecute anti-Palestinian violence and extremist hate crimes."She stated: "In the West Bank, the recent and repeated destruction of Palestinian olive groves, a critical source of income for the local population, is deplorable. We look to Israeli authorities to act decisively to protect these resources and investigate such acts."Turning to Middle East peace efforts, Rice commented: “We actively support the creation of a Palestinian state as part of a two-state solution resulting from direct negotiations without preconditions between the Israelis and Palestinians.”The US ambassador added that unilateral actions, including initiatives to grant Palestinians non-member state observer status at the United Nations, would "only jeopardize the peace process and complicate efforts to return the parties to direct negotiations."She said such actions "will neither improve the daily lives of Palestinians nor foster the trust essential to make progress towards a two-state solution."Commenting on the Palestinian fiscal crisis, the US Permanent Representative thanked Israel for its support which served to "to provide financial resources to meet the basic needs of the Palestinian people."Blaming inaction as the reason for the severity of the economic situation in the Palestinian territories, Rice urged for continued international support to the United Nations Relief and Works Agency for Palestine Refugees in the Near East, UNRWA, to further its efforts to provide assistance for Palestinian refugees in the West Bank, Gaza, and elsewhere until a final negotiated solution is reached.