Clinton offers US aid to help boost Muslim ties

By Andrew Quinn

MARRAKESH, Morocco (Reuters) - U.S. Secretary of State Hillary Clinton offered aid on Tuesday to boost ties with the Muslim world and urged Israel, the Palestinians and Arab countries to move beyond recrimination in the search for peace.

"We are determined and persistent in the pursuit of that goal," she said in a speech at a development forum in Morocco attended by Arab ministers.

After a weekend of heated words about the perceived U.S. tilt toward Israel on the issue of settlements on the occupied West Bank, Clinton said it was important for all sides to "be careful about what we say" and avoid angry rhetoric.

"We need to work together in a constructive spirit toward this shared goal of a comprehensive peace. I believe very strongly that it is attainable ... (and) that with your support we can find a way through."

Clinton's speech unveiled a modest new set of aid proposals aimed at building on President Barack Obama's promise in a June address in Cairo to make a "new beginning" on Washington's strained ties with the Islamic world.

But it came after Clinton sparked a new outburst of Arab anger by praising Israeli Prime Minister Benjamin Netanyahu's offer of "restraint" on settlements without repeating earlier U.S. calls for a freeze on them, which is the Palestinian position.

Clinton repeated that the United States is committed to reaching a two-state solution for Israel and the Palestinians, saying this was a key to achieving a peaceful and prosperous future for the region.

Hoping to cast the United States as a helpful partner in development for Muslim communities, Clinton outlined a series of small steps to increase funding for civil society groups, youth empowerment and job promotion.