JERUSALEM, (Reuters) – Israel’s deputy premier said on Saturday the Jewish State’s delay in dismantling settler outposts in the occupied West Bank is hurting bilateral relations with the United States.

The comments made by Haim Ramon came after U.S. Secretary of State Condoleezza Rice said on Friday neither Israel nor the Palestinians have done enough to meet peace commitments.

A long-stalled 2003 “road map” peace plan calls on Israel to remove outposts built without government authorisation in the West Bank and to halt all settlement activity in the territory.

It also demands the Palestinians crack down on militants. “Unfortunately we are not meeting our commitments, and this hurts us internationally and hurts our ability to continue with talks,” Ramon told Israel Radio.

Ramon said Prime Minister Olmert and Defence Minister Ehud Barak have delayed removing the outposts because they have been trying to “reach an understanding” with the heads of the Jewish settlements to avoid any confrontations.

“A week, two weeks, very shortly we need to reach a decision about the issue (of outposts). The fact that we are not doing this hurts and clouds our relationship with the United States,” Ramon said.

Removal of outposts, which often no more than a cluster of caravans or shacks, have in the past sparked violence between police and settlers.

On Friday, U.S. General William Fraser chaired a meeting between the Israelis and Palestinians and provided his first assessment of where both sides were failing to meet their peace commitments.

Friday’s closed-door meeting with Fraser was the first since a U.S.-backed conference in November relaunched peace talks with the goal of trying to reach a statehood agreement before U.S. President George W. Bush leaves office next January.

In addition to pressuring Israel, Washington believes the Palestinians need to do far more to rein in militants.