JERUSALEM (Reuters) - Israel plans to build more than 2,600 housing units in a new urban settlement in East Jerusalem, an anti-settlement group said on Friday, angering Palestinians who want a halt to all such projects before they return to peace talks.
The Peace Now group said the plan was approved earlier this week by a municipal committee, which had given the go-ahead for construction on the site which lies on land seized by Israel in the 1967 Middle East war.
There was no immediate comment from the committee on the report, but the Palestinians said they believed the news was accurate.
"Israel's plan to build 2,610 housing units ... between Bethlehem and Jerusalem, makes a mockery of ... efforts to bring about a just and lasting peace," chief Palestinian negotiator, Saeb Erekat, said in a statement.
Direct peace talks between the Israelis and Palestinians broke down a year ago after Israel refused to bow to demands that it cease all settlement building.
The United States has tried to restart talks, but they are still held up on the settlements issue. The efforts have gained new urgency in recent weeks because of a request by President Mahmoud Abbas for U.N. recognition of Palestinian independence.
Washington has threatened to veto the request, arguing that a Palestinian state should come out of peace talks, but the Palestinians say that continued Israeli settlement building proves that the negotiations process is dead.
Peace Now, which closely monitors city housing activity, said the plan would create an entirely new neighborhood in an area called "Givat Hamatos" or "aircraft hill" -- named after an Israel jet that fell at the site in the 1967 war.
The land lies within the expanded boundaries of Jerusalem, which Israel annexed unilaterally after its capture of territory in the war -- a move not internationally recognized.
Last month Israel announced a plan to expand the Gilo suburban settlement which lies close to Givat Hamatos. That decision drew heavy criticism from Arab countries and Israel's Western allies, who said it would complicate peace efforts.
Prime Minister Benjamin Netanyahu rejected those complaints and said Gilo was an integral part of Jerusalem.
Peace Now said building at Givat Hamatos would be a "game changer" adding that "the new neighborhood will complete the isolation between Bethlehem and East Jerusalem, and will destroy any possibility of a territorial solution."
The group said that the plans had been deposited for public review and that barring objections, construction could begin after 60 days. A delay of some months could occur if a committee or court needed to hear objections.
(Writing by Ori Lewis)