Just two days after resuming peace talks with Israel, the Palestinian Authority has reported to the United States what it termed the first violation of negotiation terms, a senior Palestinian official said Monday.

Yasser Abed Rabbo said the construction of 14 housing units for Jewish settlers in an East Jerusalem neighbourhood, as reported by the Israeli Peace Now pressure group, violated the terms of new talks.

"This is the first violation and first breach of the terms to start the indirect negotiations," said Abed Rabbo, the secretary of the Palestine Liberation Organization's Executive Committee, which on Saturday voted in favor of indirect negotiations under U.S. mediation.

"We will act immediately to stop this, because we will not agree that negotiations will be used as a cover for settlement activities," he said.

He added: "The PA is following this situation on the ground with the U.S.A."

A senior Israeli official, who spoke on condition of anonymity, said that 14 homes in the Ras el-Amud neighbourhood of East Jerusalem were being built privately and that the government had no authority in the matter.

Jerusalem Mayor Nir Barkat, meanwhile, vowed to continue "planning and construction throughout the city for all its residents".

Barkat's comment follow a U.S. State Department announcement on Sunday that Israel had undertaken not to build in East Jerusalem's Ramat Shlomo neighborhood for two years.

He said: "We expect the Israeli government will react to the public demand of both the Arab and Jewish sectors and enable the construction of housing for the young population that is leaving the city because of a shortage of affordable housing."

"We trust that the prime minister will not allow a freeze in Jerusalem, not in words and not in actions," the mayor said in a statement.

An Israeli decision in March to allow the construction of 1,600 new homes in Ramat Shlomo triggered a severe crisis between Jerusalem and Washington, and led to a delay in the start of the indirect talks.

Cabinet Secretary Zvi Hauser on Monday acknowledged it would take a couple of years
before construction begins on the Rmat Shlomo project - but added that projects will be built in other East Jerusalem neighborhoods where construction bids already have been issued.