Saudi Arabia on Friday bluntly rejected US appeals for relations with Israel as a way to help restart Mideast peace talks. After talks with US Secretary of State Hillary Rodham Clinton, Prince Saud Al-Faisal, Foreign Minister, said his country is not interested in taking steps suggested by US Mideast peace envoy George Mitchell until Israel accepts Arab demands to withdraw from all occupied Palestinian territories. He said Israel has not shown any interest in peace deal “Incrementalism and a step-by-step approach, has not and, we believe, will not lead to peace,” Prince Saud said as Clinton looked on at a joint State Department news conference. “Temporary security and confidence-building measures will also not bring peace. What is required is a comprehensive approach that defines the final outcome at the outset and launches into negotiations over final status issues,” Prince Saud said, referring to the borders of a future Palestinian state, control of Jerusalem, the return of Palestinian refugees, water and security. President Barack Obama, Clinton and Mitchell have all been urging Arab nations to begin confidence-building measures with Israel such as opening trade offices, allowing academic exchanges and civilian Israeli aircraft to overfly their airspace. Clinton repeated that call in her remarks, saying the Obama administration wants “the Arab states, including our friends in Saudi Arabia to work with us to take steps to improve relations with Israel, to support the Palestinian Authority and to prepare their people to embrace the eventual peace between the Palestinians and the Israelis.” “Saudi Arabia's continued leadership is absolutely vital to achieve a comprehensive and lasting peace,” she said. But Saud flatly rejected such steps. He maintained that Israel was trying to distract the world from the Arab peace initiative in which Arab states would recognize Israel provided it withdraws from Arab territories seized in the 1967 war. “The question really is: ‘What will Israel give in exchange for this comprehensive settlement offer'?” Saud said, noting that Israeli Prime Minister Benjamin Netanyahu has ignored US calls to stop constructing Jewish settlements in the West Bank and building housing in East Jerusalem. “Israel hasn't even responded to an American request to halt settlements, which President Obama described as illegitimate,” he said. The Saudi stance is complicating Mitchell's efforts to bring the Israelis and Palestinians back to negotiations. But Clinton denied that the odds were insurmountable. She said Mitchell, who just returned from his fifth trip to the region, was making progress and developing a formula to get the two sides talking again.