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Israel to Build 700 Homes in East Jerusalem

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A controversial Israeli settlement plan is throwing another wrench into the stalled Middle East peace process.

Israel plans to build nearly 700 new apartments in disputed East Jerusalem, defying demands by the United States and the Palestinian Authority for a freeze on settlement construction. While Israel has imposed a partial freeze on construction in the West Bank, government spokesman Mark Regev says that does not apply to Jerusalem, which Israel says is the eternal capital of the Jewish people.

"I want to be very clear. In the Jewish neighborhoods of Jerusalem, there is not going to be a freeze, there cannot be a freeze. We never promised to freeze construction in those areas," he said.

The United States, which is a sponsor of the Middle East peace talks, says Israeli settlements are an obstacle to peace, and the issue has strained relations with Israel's right-wing government. The Palestinians, who seek East Jerusalem as the capital of their future state, say they will not return to negotiations until all settlement activity stops.

Palestinian negotiator Saeb Erekat said, "This decision to build new housing units in East Jerusalem undermines the credibility of those involved in making the peace process continue."

Israel says peace talks should resume without preconditions.

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