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Yahoo! My Yahoo! Mail Yahoo! Search Search: Sign InNew User? Sign Up News Home - Help Navigation Primary Navigation Home Singapore Asia Pacific World Business Entertainment Sports Technology Top Stories Most Popular Secondary Navigation Africa Europe Latin America Middle East North America Search Search: Israeli plan for settlement building angers US By STEVEN GUTKIN,Associated Press Writer AP - Saturday, September 5 JERUSALEM - Israel said Friday it will construct hundreds of new housing units in West Bank settlements before any slowdown in building, an announcement that drew harsh criticism from Washington, which demands a complete settlement freeze as a prelude to renewing Mideast peace talks. ADVERTISEMENT Israeli officials painted the move as a concession to the U.S. demand because it might bring a temporary halt to other construction. But since it would also mean building the new units and finishing some 2,500 others now under construction, it looked more like defiance than acquiescence. Israel's proposal also does not include any freeze in building in east Jerusalem, which the Palestinians hope to make their future capital. The Obama administration's response did not mince words. "We regret the reports of Israel's plans to approve additional settlement construction," White House press secretary Robert Gibbs said in a statement Friday. "As the president has said before, the United States does not accept the legitimacy of continued settlement expansion and we urge that it stop." Palestinian President Mahmoud Abbas also slammed the Israeli plan. "For us, this idea is completely unacceptable," he told reporters after meeting French President Nicolas Sarkozy in Paris. "We are asking the Israelis to freeze the settlements and to go towards the next phase of peace talks." Senior Palestinian negotiator Saeb Erekat went further, saying, "I think the only thing that will be suspended by this announcement is the peace process." Israeli Prime Minister Benjamin Netanyahu appears to be trying to keep his right-leaning coalition together by building in the settlements while at the same time trying to placate the U.S., which has made halting settlements a cornerstone of its Mideast diplomacy. In recent weeks, however, the Obama team has appeared to back down somewhat from its earlier insistence that Israel halt all building in the settlements, hinting that a less than complete moratorium might be acceptable. The issue has the potential to seriously damage Obama's credibility in the Arab world, since he came out so forcefully in the beginning of his presidency in favor of a complete freeze. At the very least, Friday's announcement looked likely to either force the U.S. into a fresh showdown with Israel or into admitting that it no longer hopes to achieve a full halt to Israeli settlement building on lands the Palestinians claim for a future state. Peace talks have been suspended since shortly before Netanyahu's election, but there are expectations of a first meeting between Netanyahu and Abbas at the U.N. General Assembly in New York later this month. Abbas, however, hinted Friday that such a meeting would not take place while settlement construction continues. "Everything will depend on the decisions that will be taken concerning the freezing of the settlements," he said. Two Netanyahu aides said that in the next few days, the Israeli leader will approve the construction of hundreds of new apartments in the West Bank. They did not give a specific number, but said these units would be in addition to the 2,500 that are already under construction and will continue to be built. The construction will be centered in the main settlement blocs, areas Israel hopes to retain after any peace deal. The two Netanyahu aides spoke to The Associated Press on condition of anonymity because the government has made no official announcement. The information also appeared in major Israeli media Friday and was clearly intended for public consumption. In exchange for a settlement suspension, Netanyahu would expect the Arab world to take steps toward normalizing relations with Israel, the aides added. The U.S. has been pressing Arab countries to make moves toward normalization, an effort that so far has enjoyed only limited success. Ophir Pines-Paz, a dovish lawmaker whose Labor Party is part of Netanyahu's coalition, said issuing new building permits was "unnecessary and damaging." "I fear that issuing new permits will foil the next step _ a settlement freeze that would build confidence and allow negotiations to resume," he said. Israeli settlement activity and the Palestinians' failure to rein in militants are perhaps the biggest stumbling blocks to an eventual peace deal that would divide the Holy Land into separate Jewish and Arab states. Today, about 300,000 Israelis live among about 2.5 million Palestinians in the West Bank. An additional 180,000 Israelis live in east Jerusalem neighborhoods built since Israel captured the area in the 1967 Mideast war. Israel evacuated its 8,000 settlers in the Gaza Strip in 2005, two years before the territory was taken over by Hamas militants. Gaza and the West Bank, located on opposite sides of Israel, are together supposed to comprise a future state of Palestine. By approving new construction, Netanyahu is eyeing his hard-line allies and trying to "sweeten the pill" of impending settlement restrictions, prominent Israeli columnist Nahum Barnea wrote Friday in the daily Yediot Ahronot. "But there is one option he should give up: An attempt to have his cake and eat it too. That won't work in Washington. It won't work here," Barnea wrote. 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