Israel plans 1,300 homes in Arab East Jerusalem

JERUSALEM (Reuters) - Israel is pushing ahead with plans to build 1,300 new apartments for Jewish families in Arab East Jerusalem, the Interior Ministry said on Monday, despite fierce opposition from Palestinians.

The timing of the announcement could prove an embarrassment for Israeli Prime Minister Benjamin Netanyahu, who is in the United States looking for ways to revive Middle East peace talks that have stalled over the issue of Jewish settlement building.

Interior Ministry spokeswoman Efrat Orbach said plans for some 1,300 Jewish housing units in two neighbourhoods on land Israel seized in a 1967 war had been made public, passing another procedural stage towards eventual construction.

She said the public could still raise objections to the plans and it could take a long time before building commenced.

"It can take months or years from this point until building can actually begin, or even before tenders for building are issued," Orbach said.

News of this latest planning move came shortly after Netanyahu met U.S. Vice President Joe Biden on the sidelines of a Jewish conference in New Orleans.

When Biden visited Israel in March, the Interior Ministry announced a plan to build 1,600 homes for Jews in an area of the West Bank that Palestinians want for a future state, seriously straining relations between Israel and the United States.

Netanyahu said at the time he had no prior knowledge of the announcement and it was not clear if his office was aware of the latest move during his visit to the United States, which said it was "deeply disappointed" by the latest news.

"It is counterproductive to our efforts to resume direct negotiations between the parties," State Department spokesman P.J. Crowley said, adding that Secretary of State Hillary Clinton was expected to bring the matter up in a meeting with Netanyahu in New York on Thursday.