The plan to build 625 homes in the urban area of Pisgat Zeev adjacent to Arab East Jerusalem was approved by an Israeli Interior Ministry committee last week, some two years after it was originally proposed, Israel Radio said.

The plan will probably obstruct U.S. efforts to revive direct Israeli-Palestinian peace talks, which were launched on September 2 but suspended by Palestinians after Israel refused to extend a partial freeze on West Bank settlement building on September 26.

Israel has insisted that building in the urban areas it annexed to Jerusalem following their capture in a 1967 Middle East war were never included in the freeze. Its move to annex the West Bank land has not won international approval.

Pisgat Zeev, founded 25 years ago, is one of its largest Jewish "neighbourhoods," as Israel refers to it, with some 50,000 inhabitants. Some 500,000 Israelis live in the West Bank and East Jerusalem among 2.5 million Palestinians.

Reuters