By Howard Goller

UNITED NATIONS, Oct 1 (Reuters) - The Arab and Muslim world should offer support -- rather than set conditions -- for advancing Middle East peace, Israeli Foreign Minister Tzipi Livni told the United Nations on Monday.

Last week Saudi Arabia's foreign minister said Israel should freeze the building of Jewish settlements in occupied territories to attract Arab states to a U.S.-backed Middle East peace conference in November.

But speaking at the U.N. General Assembly, Livni said: "As the parties take the risks for peace, we look to the international community and the Arab and Muslim world, to offer support, not to stipulate conditions."

The U.S.-planned gathering of Israeli, Palestinian and other Arab officials will likely take place at the U.S. Naval Academy in Annapolis, Maryland, near Washington in mid-to-late November, a U.S. official said on Sunday.

The meeting represents the most dramatic involvement of the Bush administration in trying to broker peace between the Israelis and the Palestinians after what critics regard as nearly seven years of U.S. neglect.

Prince Saud al-Faisal, the Saudi foreign minister, said in New York last week he had been encouraged by discussions between Arab ministers and international mediators that there had been a serious attempt to revive peace moves.

He called for a freeze of Jewish settlements in the West Bank captured by Israel in the 1967 Middle East war and home to 2.5 million Palestinians but stopped short of saying it was a prerequisite for Arab participation in the peace conference.

ANNAPOLIS TALKS

Asked on Monday about the Saudi foreign minister's appeal for a settlement moratorium, Livni was reluctant to comment, telling Reuters: "The last thing that I am going to do is to negotiate with the Palestinians through the press.

"I speak in terms of principles and then in the (negotiating) room we can find the way to bridge the gap."

The Annapolis negotiations would be primarily between Israel and the Palestinians, but Washington wants other Arab states, including oil powerhouse Saudi Arabia, to take part as a way of building support for a broader peace.

In her speech Livni said: "As we have proven in the past, we are prepared for the territorial compromise that lasting peace entails." But Israel had learned in Lebanon and Gaza that withdrawal alone would not bring peace, she said.

Livni urged the United Nations to adopt a "universal democratic code" to curb extremists who were entering the democratic process to advance an violent agenda rather than to abandon it.

Whether in addressing the Islamic militant groups Hamas or Hizbollah or Iran, she said, the world must present a clear choice between the paths of violence and legitimacy, adding: "They cannot have both."

In a possible reference to Russia and China, which have delayed Western-led moves for another round of sanctions against Iran, Livni said: "There are still those who, in the name of consensus and engagement, continue to obstruct the urgent steps which are needed to bring Iran's sinister ambitions to a halt."

(Additional reporting by Patrick Worsnip)

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