US Vice President Joe Biden has told the Palestinians that they deserve a "viable" independent state with contiguous territory.
Biden's comments on Wednesday appeared aimed at reassuring the Palestinians of US support a day after Israel announced plans to build 1,600 new homes in disputed east Jerusalem. The Israeli move has overshadowed Biden's visit, which is meant to promote US-led peace negotiations that are set to begin in the coming weeks.
At a news conference with Palestinian President Mahmoud Abbas in Ramallah, Biden reiterated his condemnation of Israel's plan and urged both sides to refrain from actions that could "inflame" tensions.
The American VP said Israel's plan was undermining Palestinian faith in new peace negotiations.
"It is incumbent on both parties to build an atmosphere of support for negotiations and not to complicate them," Biden told reporters.
"Yesterday the decision by the Israeli government to advance planning for new housing units in east Jerusalem undermines that very trust, the trust that we need right now in order to begin ... profitable negotiations," he said.
Abbas, for his part, urged Israel to commit to the peace process. "The Palestinians remain committed to peace as a strategic choice," he said.
France also denounced Israel's decision to approve the construction of 1,600 housing units in east Jerusalem, deeming it "illegal" according to international law.
Biden and Abbas on Wednesday (Photo: AP)
Earlier, the Palestinians told Biden that Israel's construction plan challenged Washington's efforts to get indirect peace talks underway.
Palestinian Prime Minister Salam Fayyad said at a meeting with Biden,"This is a moment of great challenge to the effort by the United States to get the political process going again."
Fayyad said Israel's action was "damaging for sure" and "definitely undermines confidence in the prospects for peace.
Aides to Israeli Prime Minister Benjamin Netanyahu said he had been blindsided by the project's announcement by the Interior Ministry, run by Shas, an ultraorthodox, nationalist party that is a key member of his governing coalition.
Biden and Fayyad in Ramallah (Photo: AFP)
The Palestinians, who had called for a settlement freeze as a condition for resuming talks suspended since December 2008, agreed this week to indirect negotiations with Israel under US mediation, but no date, venue or agenda has been set.
Netanyahu ordered in November a 10-month halt to new housing starts in West Bank settlements but exempted those Israel considers part of Jerusalem and projects for Jewish homes in the eastern sector of the city captured in 1967.
"Messages have been sent to Biden and the Americans that there was no intention to undermine him," a senior Israeli official said. "We were genuinely surprised, just as surprised as the Americans."
In Jerusalem, Interior Minister Eli Yishai apologized for what he termed "real embarrassment" caused to Biden by the news on Tuesday that Israel would erect the housing units in an area of the West Bank it annexed to the holy city.
Netanyahu took no steps to reverse the decision. Israel considers all of Jerusalem its indivisible and eternal capital. Palestinians want east Jerusalem as the capital of a state they hope to establish in the West Bank and Gaza Strip.
Shas' promotion of the plan was an indication to the Obama administration of the problems Netanyahu would face within his government should he make bold moves, as Washington has demanded, towards a land-for-peace deal with Palestinians.
Biden kept Netanyahu and wife Sara waiting for 90 minutes at a dinner they were hosting for him and his spouse Jill on Tuesday, after the project was made public.
"I condemn the decision by the government of Israel to advance planning for new housing units," Biden said in a statement issued after he finally arrived for the meal.
He said the blueprint for Ramat Shlomo, a religious Jewish settlement, "undermines the trust we need right now and runs counter to the constructive discussions that I've had here in Israel".
Ali Waked, Reuters, AFP and AP contributed to the report