Only negotiations will bring about peace, said US Secretary of State Hillary Clinton on Thursday, rejecting Defense Minister Ehud Barak's statements on a unilateral step in the West Bank.

"The United States believes there is no substitute for direct talks between the parties," Clinton told a press conference in Denmark. "It is the only route to achieving what has long been not only a Palestinian goal and an American goal, but an Israeli goal, which are two states living side by side in peace and security."

On Wednesday Barak said that the unity government presents an opportunity to "lead a political process." He said that the parties must try to address all core issues and end the Israeli-Palestinian conflict, but should that prove impossible, Israel should consider "a temporary arrangement or even a unilateral step.

"We have discouraged unilateral action from both sides," Clinton said in Denmark. "We think that this new coalition government in Israel provides the best opportunity in several years to reach such a negotiated agreement." She noted that the coalition rests on four pillars, "and one of them was pursuing the two-state solution."

The secretary of state further added that the recent exchange of letters between Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas outlines the conditions for dialogue.

"In recent weeks, I’ve called both Prime Minister Netanyahu and President Abbas urging them to take this opportunity, to use this new opening that has come about because of the broad coalition that now exists that has pledged itself to pursuing a negotiated resolution. And we’re going to continue to urge them to do so," she said.

"We believe that there is an opportunity for direct negotiations, and we hope it was enhanced by the release of bodies today by the Israelis as a sign of confidence building.

But they need to get to the table and start dealing with all the very hard issues we know have to be resolved."