Israel announced plans Friday to build 1,300 more homes in east Jerusalem, further angering Palestinians who warned ongoing construction threatens efforts to work out a peace deal by the end of the year.

The announcement by Israel's Interior Ministry brought to more than 3,000 the number of homes Israel has approved for construction on land that Palestinians want for a state since the renewal of the U.S.-supported peace talks late last year.

Israel insisted Friday that most of the building _ in east Jerusalem _ is on land the state has already annexed and thus it does not violate its commitment in negotiations not to build on disputed land. The comments by government spokesman Mark Regev suggested that Israel will not be deterred from further building in the city.

Interior Ministry spokeswoman Sabine Hadad said Friday new apartments were approved for construction in the ultra-Orthodox Ramat Shlomo neighborhood to help alleviate a housing shortage in Jerusalem.

The fate of the holy city, site of shrines sacred to Judaism, Islam and Christianity, lies at the heart of the Israeli-Palestinian conflict. Palestinians hope to make east Jerusalem the capital of their future state, and say continued Israeli construction there makes it difficult to persuade ordinary Palestinians to support peace talks and not violence.

"We firmly condemn this project, which reveals the Israeli government's intention to destroy peace," Palestinian negotiator Saeb Erekat said.

Israel has committed under the 2003 "road map" peace plan to halt all settlement activity. But the country insists it has the right to build housing for Jews in east Jerusalem because it annexed that sector of the city shortly after capturing it in the 1967 Mideast war. By contrast, it never annexed the adjoining West Bank, which the Palestinians also claim for their hoped-for state.

"Israel makes a clear distinction between Jerusalem and the West Bank," Regev said.

A total of 270,000 Jews live in the West Bank, and an additional 180,000 live in east Jerusalem.

Privately, the Palestinians acknowledge that Israel will hold on to much of the disputed land where Jews live, and are prepared to trade it for equal amounts of Israeli territory. But they say the reports of continued construction weaken support in the Palestinian street for the administration of moderate Palestinian President Mahmoud Abbas.

Abbas briefly called off peace talks over the construction earlier this year.

At the U.S. conference where the peace talks resumed, Israel and the Palestinians set a year-end goal of reaching a final peace accord. Officials from both sides have said that target is unrealistic, given the unresolved frictions between the two sides.

Settlements constitute a major issue of contention in the talks, as do hundreds of military roadblocks that Israel has set up throughout the West Bank in an effort to stop Palestinian attackers. The checkpoints severely hamper Palestinian movement and commerce.

On Friday, the Israeli military said it removed 10 dirt roadblocks in the southern West Bank, bringing to 90 the number of unmanned barriers removed in recent months. The Palestinians say dirt roadblocks are insignificant and their removal has not improved their lives.

Further undermining the talks are the Islamic militant Hamas' rule of the Gaza Strip and Israeli Prime Minister Ehud Olmert's recent entanglement in a corruption probe that has threatened to topple him.

Polls indicate that if elections were held today, opposition leader Benjamin Netanyahu would easily sweep to power. Netanyahu takes a hard line against the Palestinians, and his accession to power could deal a major setback to peace efforts.