Israel homes plan ends peace hopes

Mr Erakat reported that PA President Mahmoud Abbas informed visiting US Vice-President Joe Biden on Wednesday that he could not restart indirect negotiations without the cancellation of the building of 1,600 housing units in the Arab quarter of the city.

East Jerusalem, which was illegally annexed by Tel Aviv after the 1967 Middle East war, has been earmarked by the international community as the capital of the future state of Palestine.

Israel's interior ministry announced fresh construction there on Tuesday evening, just 24 hours after Mr Mitchell announced that Israelis and Palestinians had agreed to begin indirect peace talks following a 15-month hiatus in negotiations - and in the midst of a visit to the region by Mr Biden.

The announcement severely embarrassed the Vice-President, who responded by rebuking his Israeli hosts.

Mr Biden said that Israel's east Jerusalem construction plan "undermines trust needed for negotiations" and he called on both sides to refrain from "inflaming" tensions.

Yesterday Mr Erekat said: "We want to hear from United States envoy George Mitchell that Israel has cancelled the decision to build housing units before we start the negotiations."

Another senior PA official said: "The PA would prefer not to enter these talks at all, but Arab and international pressure alongside a genuine desire to jumpstart these issues led us to the decision.

"However, Israel being Israel chose to prove just how incorrect the decision was by humiliating the Palestinians and the international community, despite our continued efforts to enter confidence-building talks."

Israeli Prime Minister Benjamin Netanyahu claimed that he was not informed in advance of the decision, which was announced by the interior ministry.

The prime minister summoned Interior Minister Eli Yishai on Wednesday morning and reprimanded him for the decision's "wretched, displaced, insensitive" timing.

Addressing Israeli students at Tel Aviv University on Thursday, Mr Biden declared that, in order to end "this historic conflict, both sides must be historically bold.

"The demographic realities make it difficult for Israel to be a Jewish homeland and a democratic country," he observed, adding: "The status quo is not sustainable."