Jerusalem's city council announced on Thursday plans to build three new Jewish settlements on land it occupied in 1967.
The estates will be built -- in contravention of international law -- on land that has been earmarked for a future Palestinian state, close to Bethlehem and Ramallah.
International law forbids construction on land acquired by war, but since 1967 Israel has built homes for around 500,000 Israelis in the West Bank and Jerusalem.
The construction is planned to link existing Jewish settlements in Jerusalem with each other and with settlements in the West Bank. Saeb Erekat, the head of negotiations for the Palestinians, said the building plans suggested that Israel had no real interest in peace.
"Today it is obvious that Israel wants Jerusalem for only some of Jerusalem's people," he said. "I wish Israel would do what majorities of both Palestinians and Israelis want: accept the two-state solution and accept peace."
While Israel says that it supports the creation of a Palestinian state, its building projects -- which include walls, fences, bypasses and tunnels as well as settlements -- restrict the amount of land that would be available to the new state.
In 1967 Israel annexed East Jerusalem, but most of its residents are in limbo, neither residents of Israel, nor of the West Bank.
To ensure its hold on East Jerusalem Israel has built a series of settlements which divide the city from its hinterland in the West Bank. The annexation was condemned by the UN and has not been recognized by any major country.
"By severing East Jerusalem from the rest of the West Bank," Erekat said, "the Jerusalem-area wall and settlements mean no viable Palestinian state, no Palestinian capital in East Jerusalem, and thus no viable two-state solution."
Mark Regev, a spokesman for the Israeli foreign ministry, said the government made no distinction between East Jerusalem and the rest of Israel.
"There is a difference between Jerusalem, where we have sovereignty, and the West Bank where we do not and whose future will be the subject of future negotiations," he said.
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