Ellington

JERUSALEM (AP) — Israel's Housing Ministry said Tuesday it has launched plans for potential construction of thousands of new homes the West Bank, including development of a contentious area outside of Jerusalem, prompting a Palestinian threat to walk out of Mideast peace talks.

It was the latest blow to the U.S.-brokered peace talks, which have made no visible progress since they were launched over the summer and have become deadlocked amid disputes over Israeli settlement construction. U.S. officials said they were blindsided by the Israeli announcement and demanded an explanation.

Saeb Erekat, the chief Palestinian negotiator, said he had called the United States, Russia, the European Union, the United Nations and the Arab League to voice his objections.

"I informed them that if Israel implements this decision, then this means the end of the negotiations and the end of the peace process," Erekat said.

The Palestinians claim the West Bank, east Jerusalem and the Gaza Strip, territories captured by Israel in 1967, for an independent state. They say Israeli settlement construction on the lands they claim is a sign of bad faith.

More than 500,000 Israelis now live in the West Bank and east Jerusalem. Israel withdrew from Gaza in 2005. The international community, including the U.S., rejects settlements as illegal or illegitimate.

In Washington, State Department spokeswoman Jen Psaki said the White House had been caught off guard by the Israeli move.

"We were surprised by these announcements, and are currently seeking further explanation from the government of Israel," she said.

"Our position on settlements is quite clear — we do not accept the legitimacy of continued settlement activity. We've called on both sides to take steps to create a positive atmosphere for the negotiations," she added.

Under heavy U.S. pressure, the Palestinians dropped a longstanding demand for a halt in settlement construction and agreed to renew peace talks with Israel in late July after a nearly five-year break.

To lure the Palestinians back to the table, Israel agreed to release 104 of the longest-serving Palestinian prisoners, all convicted in violent attacks on Israelis. The Palestinians also say they received assurances that settlement construction would be constrained.

Both sides have said the negotiations have made no progress. The situation deteriorated further late last month when Israel announced plans to build thousands of new homes in the West Bank and east Jerusalem.

In an interview broadcast on Israeli and Palestinan TV last week, U.S. Secretary of State John Kerry said continued settlement construction raised questions about Israel's seriousness about pursuing peace. Erekat said there have been no negotiations for the past week.

Israeli officials tried to play down Tuesday's announcement. They said the homes were part of a long-range feasibility study, and that any construction would be years away.

The Housing Ministry said it was recruiting architectural firms to look into possible construction of some 600,000 homes nationwide to ease a housing crunch. It refused to say how many of these homes were in Jewish settlements. But the anti-settlement watchdog group Peace Now said the plans included nearly 20,000 apartments in the West Bank and 4,000 in east Jerusalem.

Among the plans are 1,500 units in a strategic area just outside of Jerusalem known as E1. The Palestinians have said the project would be devastating to their dreams of independence, since it would separate the West Bank from east Jerusalem, their hoped-for capital, and drive a big wedge between the northern and southern flanks of the West Bank.

Prime Minister Benjamin Netanyahu's office said the Israeli leader had ordered the ministry to put the E1 plan on hold due to the extreme sensitivity.