Israel announced plans Tuesday to build more than 1,000 homes in disputed east Jerusalem, infuriating the Palestinians and triggering a new crisis in already troubled peace talks.
Palestinian negotiator Saeb Erekat said, "We condemn these Israeli declarations, and once again we ask the Israeli government to give peace a chance by stopping all settlement activity."
The fate of east Jerusalem is the thorniest issue in the peace talks. Israel captured the area in the 1967 Middle East war, later formally annexing it and building a string of neighborhoods that are now home to 180,000 Israelis.
Israel expects to retain Jewish neighborhoods in east Jerusalem under a peace deal, but the Palestinians see construction there as threatening a final agreement.
The Palestinians claim east Jerusalem as the capital of a future independent state and have been urging Israeli Prime Minister Ehud Olmert to halt construction in the area.
Israel's housing minister, Zeev Boim, announced the latest construction plans in response to assertions from Jerusalem's city manager that Olmert was holding up work in east Jerusalem. Boim said a partial building freeze ordered recently applied only to settlements in the West Bank and not Jerusalem.
In Washington, spokesman Sean McCormack said the State Department would seek clarification from the Israelis about the announcement, which he called a "potential irritant" to the peace process along with continued rocket attacks into Israel from Gaza.