Israel has been lobbying U.S. President Donald Trump to recognise Israeli sovereignty over the Golan Heights, which it effectively annexed in 1981. Israel says the area, captured from Syria in a 1967 war, is a critical buffer zone to defend its territory. A separate section in the report, on the West Bank and Gaza Strip - areas that Israel also seized in 1967 - also did not refer to those territories as being "occupied" or under "occupation".
Any change in U.S. terminology on the West Bank and Gaza Strip is certain to raise Palestinian concern over the strength of Washington's commitment to the establishment of a Palestinian state envisaged by interim peace agreements in the 1990s. A State Department official, commenting on the language used in the report, said: "The policy on the status of the territories has not changed."
The United States uses the term "territories" when it refers to the West Bank and Gaza Strip. The official, Michael Kozak, head of the State Department's human rights and democracy bureau, said Washington was seeking "a negotiated settlement" there. (Writing by Jeffrey Heller Editing by Rami Ayyub and Frances Kerry)