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Assistant U.S. Secretary of State David Welch said Saturday his talks with Lebanese officials were an important step toward ending the Lebanese-Israeli conflict, but cited difficult "challenges" still to be overcome.

The American diplomat gave no indication of progress in efforts to end the fighting that has raged between Israel and Hezbollah guerrillas since July 12, despite U.S. assertions that it and the French government were nearing agreement on a U.N. resolution that would establish a cease-fire in combination with steps to ensure a lasting peace. The U.S. State Department said on Friday that the resolution could be ready early next week.

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"My meeting today was an important step to putting behind us forever the terrible violence witnessed in the past three weeks, with a lasting political framework and an international force to support the Lebanese armed forces," he told reporters after meeting with Prime Minister Fuad Saniora.

"The challenges facing Lebanon today are much more difficult than we would have imagined weeks ago," he added.

Welch took no questions after issuing the brief statement.

He arrived in Beirut late Friday, and the leading An-Nahar daily said Welch met immediately with Saniora, but the government official, who spoke on condition of anonymity because he is not authorized to give official statements, said he had no information on whether a latenight meeting was held.

Welch met Saturday with Parliament speaker Nabih Berri, who has been negotiating on behalf of Hezbollah, and again with Saniora.

Lebanese army troops were deployed in force around the Government House, against small anti-U.S. protest.

Welch assured the Lebanese government of continued U.S. support even as Israel on Saturday dropped leaflets on the southern city of Sidon warning residents to leave.

"Much has happened in the past three weeks, but the commitment of the United States to Lebanon remains firm, remains enduring and is not negotiable," Welch said as he emerged from Government House in central Beirut.

"This country, with its factories damaged, with its supply routes interrupted and even with the fuel situation, faces even greater economic challenges than before," Welch said.

Israel has imposed a naval blockade on Lebanese ports, cut every main highway out of the country to Syria with airstrikes and severely bombed the infrastructure.

He said Lebanon "must be reconnected" to the outside world to bring in supplies and aid and ensure safe routes for people to leave or return.