Israel's construction ministry said on Sunday it proposed building about 740 new homes on occupied land near Jerusalem next year, a move that could disrupt newly launched peace talks with the Palestinians.
The issue of Israeli settlement building in the Jerusalem area has clouded negotiations between Israel and the Palestinians launched at a peace conference last month in Annapolis, Maryland.
The first round of talks following Annapolis opened in discord earlier this month after Palestinians demanded Israel drop plans to build some 300 new homes in an area near Jerusalem known to Israelis as Har Homa and to Palestinians as Abu Ghneim.
The 740 new homes are included in the construction ministry's budget proposal for 2008, officials at the ministry said. The proposal requires parliamentary approval.
The construction ministry proposal includes about $25 million for 500 homes at Har Homa and 240 at the Maale Adumim settlement near Jerusalem. Last year's ministry budget allowed for the construction of nearly 1,000 homes in the same two settlements.
"We're not aware of any new decision to build in Maale Adumim," said Mark Regev, Israeli Prime Minister Ehud Olmert's spokesman. Regarding the Har Homa construction, Regev said it was inside the existing built-up area, and is considered part of Jerusalem. "It has a different legal status," he said. Palestinians dispute this.
Israel annexed Arab East Jerusalem during a 1967 Middle East War, a move not recognised internationally. The Jewish state hopes to keep Maale Adumim and other large settlement blocs as part of a land swap in any final peace deal. The Palestinians have demanded that Israel immediately halt all settlement activity as called for under a long-stalled "road map" peace plan. "This is destructive. Every day there is a new plan, a new settlement. This is not the way to build trust," said senior Palestinian negotiator Saeb Erekat.
He said the construction ministry announcement put in jeopardy peace negotiations set to resume on Monday. Israeli officials defended the new construction plans.
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