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JERUSALEM, Israel - Facing Arab criticism, U.S. Secretary of State Hillary Rodham Clinton backed off praise for Israel's progress toward peace talks, Monday, saying that while they were moving in the right direction, their offer "falls far short" of U.S. expectations.

Clinton said her praise of Israel's offer to restrict Jewish settlement activity had been intended as "positive reinforcement."

Her remarks Saturday had drawn widespread criticism from Arab nations who interpreted...
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