CAIRO/WASHINGTON (AFP) - Australian Foreign Minister Kevin Rudd warned in talks with Egypts President Hosni Mubarak on Saturday that time is running out on the Israeli-Palestinian peace process. Canberra is concerned because no real progress has been made in the US-brokered peace process and time is running out, Rudd told reporters after the meeting in Cairo. The construction of new Jewish settlements in the occupied West Bank undermines the push for a peace settlement, which should pave the way for an independent Palestinian state and guarantee Israelis security, he said. Rudd later met Egyptian Foreign Minister Ahmed Abul Gheit and said at a joint news conference that Israeli settlements contribute to destroying the chances of peace. The Australian foreign minister said he expected to visit Israel soon and would reiterate this position, adding however that the Jewish state had security fears and that these should be taken into account. Abul Gheit said all eyes were now on what steps the United States will take to help kick-start peace talks between Israel and the Palestinians, noting that US Middle East envoy George Mitchell was due back in the region on Monday. The Americans have not said they gave up their efforts... We will listen to their point of view, he said. On Friday, Rudd issued a joint call with Arab League chief Amr Mussa, whom he also met in Cairo, for an urgent resumption of peace talks between Israel and the Palestinians. Meanwhile, US Secretary of State Hillary Clinton on Friday sought a clean start in Israeli-Palestinian peace talks by urging both sides to tackle without delay the core issues of their decades-old conflict. Clinton made the appeal in a speech days after the Obama administration admitted it had failed to persuade Israel to renew a freeze on settlements in the West Bank, effectively ending direct peace talks launched three months ago. She urged both sides to get to the heart of the issues dividing them even if they cannot agree to meet face-to-face because the Palestinians first demand a halt to settlements, both in the West Bank and East Jerusalem. It is time to grapple with the core issues of this conflict: on borders and security, settlements, water and refugees, and on Jerusalem itself, Clinton told an audience that included key US, Israeli and Palestinian players. In the days ahead, our discussions with both sides will be substantive, two-way conversations, with an eye toward making real progress in the next few months on the key questions of an eventual framework agreement, she said. The US will not be a passive participant, Clinton said in her speech sponsored by the Brookings Institutions Saban Center for Middle East Policy. We will push the parties to lay out their positions on the core issues without delay, and with real specificity, she said. We will work to narrow the gaps, asking tough questions and expecting substantive answers. And, in the context of our private conversations with the parties, we will offer our own ideas and bridging proposals when appropriate. She acknowledged that direct talks were still required to reach a framework agreement, but she expected that both sides, after tackling some of the core issues, would re-establish enough trust to return to face-to-face talks. The speech sought to overcome the hurdle posed by settlements, which have clouded the peace talks ever since President Barack Obamas administration backed Palestinian demands for a halt to settlements nearly two years ago. She now said settlements should be dealt with as part of efforts to determine the borders of a future Palestinian state. The Palestinians meanwhile clung to their demand to end settlements on the land they want for a future state, including in East Jerusalem, which they want to be the capital. Chief Palestinian negotiator Saeb Erakat emerged earlier from an hour of talks with Clinton saying it was premature to speak about a course of action after the failure on settlements and again blamed Israel for the deadlock. The Israeli government had a choice between settlements and peace and they chose settlements, Erakat told reporters outside the State Department. In her flurry of consultations here, Clinton also met with Palestinian Prime Minister Salam Fayyad, Israeli Defense Minister Ehud Barak, and Tzipi Livni, head of Israels centrist opposition Kadima Party, US officials said. These talks follow sessions with Israels chief peace negotiator Yitzhak Molcho on Thursday. Although Clinton now sought to relegate settlements to the debate on core issues, she said their continued expansion is corrosive not only to peace efforts and the two-state solution, but to Israels future itself. Clinton said the most sensitive of all the core issues was that of the fate of Jerusalem, which both sides claim as their capital. We believe that through good-faith negotiations, the parties should mutually agree on an outcome that realizes the aspirations of both parties for Jerusalem and safeguards its status for people around the world, she said. US Middle East envoy George Mitchell is due to return to the Middle East on Monday for talks with Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas, Clinton spokesman Philip Crowley said. Clinton said he will later visit a number of Arab and European capitals. The Arab states have a pivotal role to play in ending the conflict, Clinton added. They should stake steps that show Israelis, Palestinians and their own people that peace is possible and that there will be tangible benefits if it is achieved, she said. US officials have urged Arab countries like Saudi Arabia to begin steps toward normalizing ties with Israel, such as opening business links or allowing Israeli flights to fly over their territory.