JERUSALEM // Israel announced yesterday that it was to build 1,600 new homes in an illegal Jewish settlement in East Jerusalem, hours after the visiting US vice president, Joe Biden, had described renewed peace talks between Israel and the Palestinians as “a moment of real opportunity”.

The White House's top spokesman said the United States condemns Israel's approval of settlements. Robert Gibbs yesterday told reporters that Mr Biden would issue a detailed statement shortly. Mr Gibbs said President Barack Obama's position on the settlements is known by both the Israelis and the Palestinians.

The announcement of building work in the settlement of Ramat Shlomo followed a decision by the Israeli defence ministry on Monday to issue permits for 112 homes in the West Bank settlement of Beitar Ilit, near Bethlehem.

One Jerusalem city councillor described it as a calculated “slap to the face” of the United States.

Both decisions, which further undermine an already discredited temporary and partial settlement freeze by Israel, are likely to be an embarrassment to the administration of Barack Obama.

Mr Biden, the most senior member of the administration to visit Israel, arrived this week to shore up the credibility of indirect peace talks between Israel and the Palestinians announced by the United States on Monday.

Saeb Erekat, the Palestinians’ chief negotiator, said the announcement of 1,600 new settlement homes was part of “a systematic policy to destroy the peace process”.

The office of the Palestinian president Mahmoud Abbas issued a statement saying Mr Abbas had telephoned Arab League chief Amr Moussa to discuss “urgent policy measures appropriate to address the escalating Israeli provocations”.

It followed remarks from the Palestinian Authority spokesman Nabil Abu Rudeina who told Agence France-Presse that the plan to build new settler homes was “a dangerous decision and will hinder the negotiations”.

Palestinian negotiators consider East Jerusalem as the capital of any future Palestinian state. Israel has annexed the area in violation of international law.

Earlier in the day, Mr Biden praised Benjamin Netanyahu, the Israeli prime minister, for agreeing to resume negotiations with the Palestinians, saying the United States would always “stand by those who take risks for peace”.

The “proximity talks” are to be overseen by George Mitchell, Mr Obama’s Middle East envoy, who will shuttle between the three parties.

The United States is said to have given the talks four months to show results.

“Historic peace will require both sides to make historically bold commitments,” Mr Biden said yesterday after a two-hour private meeting in Jerusalem with the Israeli prime minister.

In pledging to pursue the talks, Mr Netayanhu repeated his earlier condition that the Palestinians recognise Israel as a Jewish state.

Also yesterday, during a meeting with Shimon Peres, the Israeli president, Mr Biden said Israel and the Palestinians were “actually very much more in line than they are in opposition”.

Those upbeat assessments, however, appeared to be contradicted by Israel’s announcements of further settlement building.

Meir Margalit, a Jerusalem city councillor, said the Ramat Shlomo settlement had been built a decade ago on lands belonging to the neighbouring Palestinian community of Shuafat.

He said the intention behind the announcement “was to slap the US administration in the face”.

A US state department official said: “We’ve just seen the reports and are looking into them. We continue to urge all sides to avoid counterproductive and unilateral actions that, intended to or not, can undermine trust or make it harder for negotiations to succeed.”

Ramat Shlomo – like Beitar Ilit, where 112 houses were announced on Monday – is home to fundamentalist religious Jews who have a very high population growth rate. Mr Netanyahu has in the past justified his opposition to a settlement freeze on the grounds that home-building is necessary to cope with what he has called “natural growth” among the settlers.

The construction blueprint for Ramat Shlomo, published by Israel’s ministry of interior, could be implemented after a 60-day review period, a ministry representative said.

In a further blow to the prospects of the peace talks, a report yesterday in Haaretz, a liberal daily newspaper, noted that, under Israeli pressure, the United States had agreed to treat the understandings reached between Israel and the Palestinian Authority following the 2007 Annapolis conference as non-binding when negotiations resume.

Ehud Olmert, Mr Netanyahu’s predecessor, had offered a 94-per-cent withdrawal from the West Bank and land swaps for the remaining six per cent.

Mr Biden also used his press conference with Mr Netanyahu yesterday to emphasise the US commitment to Israel’s regional security, saying Washington was “absolutely committed” to preventing Iran from obtaining nuclear weapons.

“There is no space between the US and Israel when it comes to Israel’s security,” he said after their meeting.

Nonetheless, the US vice president was believed to have used the talks to warn Israel off launching a military strike against Iran. Instead, he sought to persuade Mr Netanyahu to back Washington’s policy of working towards strengthening sanctions on Tehran.

Regarding that policy, Mr Netanyahu said: “The stronger those sanctions are, the more likely it will be that the Iranian regime will have to choose between advancing its nuclear programme and advancing the future of its own permanence.”

Israel, which is the only nuclear-armed state in the Middle East, is known to favour crippling sanctions on Iran’s trade in oil and gas to dissuade Tehran from acquiring a nuclear warhead. It has not ruled out a unilateral military strike if it believes sanctions are failing.

Iran denies its nuclear ambitions extend beyond developing a civilian nuclear programme.

Mr Biden is due to meet Tony Blair, the Middle East envoy for the Quartet, today followed by talks in Ramallah with Mr Abbas and Salam Fayyad, the Palestinian prime minister.