By Steve Holland
JERUSALEM, July 30 (Reuters) - U.S. Republican presidential candidate Mitt Romney on Monday tapped Jewish-American donors for more than $1 million, ending a trip to Israel that aimed to show he would be a better ally than President Barack Obama.
After days in which Romney spoke mostly on foreign policy issues, the fundraiser returned him to more comfortable turf - the state of the U.S. economy, which he sees as the main issue in the Nov. 6 election.
"What we are seeing now are policies that have not worked for the American people, and will not work," Romney said without mentioning Obama, the Democrat he has blamed for failing to substantially reduce U.S. unemployment, now pegged at 8.2 percent.
It was the second fundraiser of Romney's trip abroad. He picked up $2 million from Americans in London, as the candidates compete for cash for the expected multi-million-dollar burst of political TV ads in the last 100 days of the campaign.
Las Vegas casino owner Sheldon Adelson, an ally of Israeli Prime Minister Benjamin Netanyahu as well, sat to Romney's left at the breakfast event in Jerusalem.
Adelson had backed Romney rival Newt Gingrich in the Republican primary, but has turned his support to the former Massachusetts governor.
Adelson has contributed some $10 million to a "Superpac" that supports Romney. A Superpac is an outside group not directly affiliated with a campaign that can support a candidate or specific causes.
Romney received a warm welcome from Israeli leaders as he tried to portray himself as a better friend of the Jewish state than Obama, whose relationship with Netanyahu has been testy.
While Romney carried a clear pro-Israel message, he also noted a "stark difference" in the average incomes of Israelis and Palestinians - $25,000 and $10,000, respectively.
Palestinian Prime Minister Salam Fayyad, who held a brief meeting with Romney on Sunday, told Reuters in a Twitter exchange they had discussed "the peace process and the economical challenges in Palestine."
But on Monday, Palestinians accused Romney of undermining peace prospects by calling Jerusalem "the capital of Israel," ignoring their own claims to the city and most world opinion.
Romney used the term on Sunday to sustained applause from his Israeli audience in Jerusalem.
"We condemn his statements. Those who speak about the two-state solution should know that there can be no Palestinian state without East Jerusalem," chief Palestinian negotiator Saeb Erekat told Reuters.
Romney began his foreign trip in London, where he irked Britons by questioning their readiness to host the Summer Olympics.
Romney heads to Poland later on Monday, where he is scheduled to meet with Solidarity leader Lech Walesa in Gdansk, as well as Polish Prime Minister Donald Tusk and to visit a World War Two memorial.
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33 out of 100 seats are up for election. 51 are needed for a majority.
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* Includes two independent senators expected to caucus with the Democrats: Angus King (Maine) and Sen. Bernie Sanders (Vt.).
All 435 seats are up for election. 218 are needed for a majority.