MARRAKECH, Morocco – Trying to mute Arab criticism that the Obama administration had retreated from its tough stance on Israeli settlements, U.S. Secretary of State Hillary Rodham Clinton on Monday softened her praise for Israel’s offer to restrain new housing in Palestinian areas.

While Israel was moving in the right direction in its offer to restrict but not stop the settlements, Clinton said, its offer ‘falls far short’ of U.S. expectations.

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 Persian Gulf ministers who interpreted it as a U.S drawback on settlements, which have been the main obstacle to a resumption of Israeli-Palestinian peace talks.

In a sign of U.S. eagerness to calm Arab concerns, Clinton is extending her trip by one day to fly to Cairo to meet with President Hosni Mubarak today, her staff announced. She had been scheduled to return to Washington yesterday.

Clinton’s comments in Jerusalem on Saturday appeared to reflect a realization within the Obama administration that Netanyahu’s government will not accept a full-on 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.

Clinton had traveled to the region only reluctantly, concerned her visit might be seen as a failure, according to several U.S. officials. She agreed to meet Israeli and Palestinian leaders after pressure from the White House, according to the officials, who spoke on condition of anonymity to discuss internal administration thinking.

During a photo-taking session Monday with her Moroccan counterpart, Clinton was asked by a reporter about the Arab reaction, and she responded by reading from a written statement that appeared designed to counter the skepticism about the Obama administration’s views on settlements.

‘Successive American administrations of both parties have opposed Israel’s settlement policy,’ she said. ‘That is absolutely a fact, and the Obama administration’s position on settlements is clear, unequivocal and it has not changed. As the president has said on many occasions, the United States does not accept the legitimacy of continued Israeli settlements.’

Clinton’s tweaking of her earlier remarks appeared to satisfy at least some of the Morocco meeting attendees.

Palestinian Foreign Minister Riad Malki said Monday that ‘we have heard her say something completely different from that statement in line with previous statements,’ so we are happy that such a position was highlighted and brought back to the right line and right now we will see how things will go.’

Malki added that ‘we completely appreciate the sincere efforts made by President Barack Obama and his team to take this issue as a top priority and to try to deal with it from day one.’

In her recalibrated comments Monday, Clinton also called on the Israelis to do more to improve ‘movement and access’ for Palestinians and on Israeli security arrangements.

She added, however, that Israel deserved praise for moving in the right direction.

‘This offer falls far short of what we would characterize as our position or what our preference would be,’ she added. ‘But if it is acted upon, it will be an unprecedented restriction on settlements and would have a significant and meaningful effect on restraining their growth.’

In her statement to reporters, Clinton also stressed that the Palestinian authorities deserved credit for what she called ‘unprecedented’ steps to improve security in the West Bank and praised the Palestinians for progress in training their security forces.

On Monday evening, Clinton met with representatives of the Gulf Cooperation Council, plus officials from Egypt, Jordan, Iraq and Morocco. Clinton also flew Monday to the south-central city of Ouarzazate for an audience with King Mohammed VI, then returned to Marrakech for talks with foreign ministers of several Persian Gulf nations.

Clinton was expected to meet separately with Saudi Foreign Minister Prince Saud al-Faisal, who has rejected U.S. appeals for improved Arab relations with Israel as a way to help restart Middle East peace talks.

After taking office in January, Obama buoyed Palestinian hopes for progress toward establishing a Palestinian state with his outreach to the Muslim world and an initially tough stance urging a full freeze to all settlement construction.

But after making little headway with the Israelis in recent months, Clinton urged Palestinian leader Mahmoud Abbas in a face-to-face meeting in Abu Dhabi on Saturday to renew talks, which broke down late last year, without conditions. Abbas said no, insisting that Israel first halt all settlement activity in the West Bank and east Jerusalem – lands the Palestinians claim for a future state.

Then, at a joint news conference with Israeli Prime Minister Benjamin Netanyahu late Saturday in Jerusalem, Clinton praised Netanyahu’s offer to curb some settlement construction, saying it was an unprecedented gesture.

That statement provoked a chiding by Palestinian government spokesman Ghassan Khatib. Jordan and Egypt also issued statements Sunday critical of the latest U.S. approach.

Editor’s note: Associated Press writer Matthew Lee in Washington contributed to this report.

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