OCCUPIED JERUSALEM (AFP) - Israel on Tuesday approved the construction of 1,600 new settler homes in East Jerusalem, announcing the move as US Vice President Joe Biden met top Israeli officials to boost renewed peace efforts.

The controversial move infuriated the Palestinians who consider settlements to be a major hurdle in long-hobbled attempts to reach a peace accord, and who want occupied East Jerusalem as the capital of their promised state.

“This is a dangerous decision and will hinder the negotiations,” Palestinian Authority spokesman Nabil Abu Rudeina told AFP.

“We consider the decision to build in East Jerusalem to be a judgment that the American efforts have failed before the indirect negotiations have even begun.”

The announcement came two days after the Palestinians grudgingly agreed to indirect talks after months of US shuttle diplomacy and coincided with the trip by Biden, the highest-level Obama administration official to visit Israel.

Biden had earlier pledged Washington’s “absolute, total, unvarnished commitment to Israel’s security”.

“Progress occurs in the Middle East when everyone knows there is simply no space between the United States and Israel. There is no space between the United States and Israel when it comes to Israel’s security,” he said after talks with hawkish Prime Minister Benjamin Netanyahu in Jerusalem.

Biden also stressed Washington’s determination to prevent Iran from acquiring nuclear weapons, and demanded that Tehran stop supporting “terrorist groups”, which he said threaten Israel as well as US interests.

Biden said he was “very pleased” with the decision to hold new Middle East talks, despite deep scepticism about their prospects.

“We hope that these talks will lead, and they must lead eventually, to negotiations and direct discussions between the parties,” he told Netanyahu.

“President Obama and I strongly believe the best long-term guarantee for Israel’s security is a comprehensive Middle East peace with the Palestinians, with the Syrians, with Lebanon and leading eventually to full and normalised relationships with the entire Arab world,” Biden said.

After meeting the US vice president, Netanyahu underlined the need “to be persistent and purposeful in making sure we get to those direct negotiations that will enable us to resolve this conflict”.

But the announcement of 1,600 new homes in the Ramat Shlomo settlement had been certain to anger the Palestinians, who have long said they will not deal directly with Israel until there is a total freeze on settlement activity.

Israel on Monday had already given the go-ahead for 112 new homes in a West Bank settlement in an exception to a partial moratorium on settlement construction announced in November which does not include East Jerusalem.

Biden also held talks with President Shimon Peres, who cautioned against premature expectations.

“Even in Hollywood the happy ending is at the end,” Peres said at the start of their meeting.

Biden heads on Wednesday to the West Bank city of Ramallah for talks with Palestinian President Mahmoud Abbas and Prime Minister Salam Fayyad, and he also plans to meet Britain’s former premier Tony Blair, the special envoy for the Quartet of key diplomatic players.

Washington has pushed for months to have both sides resume talks, but direct negotiations have been on hold since Israel launched a devastating 22-day offensive in the Hamas-ruled Gaza Strip in December 2008.

US envoy George Mitchell has also been in the region to pave the way for the indirect talks, and plans to return next week.

Biden, who is accompanied by his wife Jill, also visited the Mount Herzl national cemetery in Jerusalem, where he laid a wreath at the grave of former premier Yitzhak Rabin, who was assassinated in 1995 by a Jewish extremist opposed to a peace deal with the Palestinians.

He then headed to the nearby Yad Vashem Holocaust memorial and was to visit Jordan on Thursday for talks with His Majesty King Abdullah.