Israel has unveiled a controversial new plan for settlement expansion, putting further strain on the peace process. As Robert Berger reports from VOA's Jerusalem bureau, the announcement may be connected to a deadly Palestinian terrorist attack last week.

Israeli Housing Minister Ze'ev Boim announced that Israel plans to build more than 1,000 new homes in the occupied territories. He said the plan includes 350 apartments in Givat Ze'ev, a West Bank settlement near Jerusalem, and 750 homes in Pisgat Ze'ev, a settlement in East Jerusalem.

"We continue according to our plans, and there are no limitations," said Ze'ev Boim.

The new homes will be built on land the Palestinians seek for a future state. Both the Palestinians and the United States say settlement construction violates the "road map" peace plan, which is the foundation for new peace talks. Palestinian negotiator Saeb Erekat.

"This decision is undermining all efforts being exerted to revive the peace process," said Saeb Erekat.

Israel says it reserves the right to build in East Jerusalem and settlement blocs, which it says will remain a part of Israel in any final peace agreement with the Palestinians.

Announcement of the settlement expansion came just three days after a Palestinian gunman attacked a Jewish seminary in Jerusalem and killed eight young students. The seminary was a bastion of the settlement movement in the West Bank.

Israeli media say the construction plan is Prime Minister Ehud Olmert's way of appeasing the settlers and right-wing members of his government.