U.S. slams Israel's settlement decision

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Washington -- Secretary of State Hillary Clinton is scheduled to meet with Israeli Prime Minister Benjamin Netanyahu on Thursday in New York, a day after she said the United States is "deeply disappointed" with Israel's decision to build new housing units in sensitive areas of east Jerusalem.

"This announcement was counterproductive to our efforts to resume negotiations between the parties," Clinton said Wednesday, stressing that both parties should avoid actions that might undermine trust, including action in Jerusalem.

Clinton made the remarks at a joint press briefing with Palestinian Authority Prime Minister Salam Fayyad, where she announced an additional $150 million in aid to the Palestinian Authority. Fayyad appeared at the briefing via a remote video conference from Ramallah in the West Bank.

Clinton expressed hope that the peace talks will continue, and said the United States will keep working to resume negotiations to address the housing issue, among others.

"We still believe a positive outcome is both possible and necessary," she said.

The Israeli government said Monday it is proceeding with plans for about 1,000 new housing units in east Jerusalem, a move that the chief Palestinian negotiator said would derail already suspended peace talks.

Ahead of his visit to the United States, Netanyahu said he was looking forward to "important meetings" with U.S. officials, including Clinton, "who share in the great efforts that we are making in order to continue the peace process."

"I hope that on this visit, we and the U.S. administration will find the way to advance the diplomatic process while maintaining Israel's national and security interests," the Israeli leader said.

Construction of settlements in the West Bank, as well as new housing in east Jerusalem, have been criticized by the Palestinians, and such activity has been a stumbling block in the direct negotiations renewed by the Obama administration.

President Obama on Tuesday criticized Israel's plans to build in the disputed area.

"This kind of activity is never helpful when it comes to peace negotiations," Obama told reporters while on a trip to Indonesia.

Saeb Erakat, the chief Palestinian negotiator, told CNN that the announcement showed Israel is committed to the settlements at the cost of a possible peace agreement.

But Netanyahu's office issued a statement saying the construction has nothing to do with the settlement issue, since Jerusalem "is the capital of the state of Israel."

"Israel sees no link between the peace process and its development plans in Jerusalem," the statement read.

State Department spokesman P.J. Crowley said Wednesday that there is such a link, in that both parties are responsible for creating conditions for successful negotiations.

"So to suggest that this kind of announcement would not have an impact on the Palestinian side, I think, is incorrect," Crowley said.

Israel seized east Jerusalem in the 1967 Six Day War, annexed the ancient city and established the nation's capital there. The international community, however, does not recognize Jerusalem as Israel's capital, and embassies in the country have based themselves in Tel Aviv.

Palestinians envision the eastern part of the city as its future capital in a two-state solution.
 
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