The Palestinian Authority on Thursday attacked Israeli plans for 1,000 new homes in Jerusalem as "destroying" efforts by Washington's top diplomat to revive the peace process, AFP reported.
The United States also warned that such a plan would run counter to efforts to reach a peace deal.
On Wednesday, Channel 10 News reported that Israel had approved tenders for the construction of 300 new homes in the Ramot neighborhood Jerusalem and plans to build more housing units in the Gilo neighborhood as well.
"We consider the recent decision of the Israeli government to build a thousand homes in east Jerusalem as effectively destroying the efforts of [U.S. Secretary of State John] Kerry," the PLO’s top negotiator, Saeb Erekat, told AFP.
He accused Israel of having "a systematic plan for destroying Kerry's efforts which involves an escalation of settlement building, a displacement of the population of the Jordan Valley, an increase of settler attacks against our people and confiscation of our land."
The U.S. State Department called the move "counterproductive", according to AFP.
"Israelis must recognize that continued settlement activity and new housing construction in East Jerusalem is counterproductive to the cause of peace," spokeswoman Jen Psaki said.
"The U.S. position on settlements is clear and has not changed: we do not accept the legitimacy of continued Israeli settlement activity, which would undermine peace efforts and would contradict Israeli commitments and obligations," she added.
However, Ofir Gendelman, a spokesman for Prime Minister Binyamin Netanyahu, said the plans were not new, and accused the PA of looking for any excuse to avoid peace talks.
"The Palestinians keep making up excuses in order to run away from peace negotiations with Israel," Gendelman was quoted as having written on Twitter.
"The Palestinians recycle old claims which are based on false information. They run to the media to avoid discussing outstanding issues," he said, calling for them to "resume peace talks immediately".
Gendelman said the plan to build new homes in Gilo and Ramot was "not new" and had been "reposted due to administrative requirements."
The Channel 10 report on Wednesday explained that the tenders in question were published last November, right after the Palestinian Authority’s unilateral move at the United Nations which got it upgraded to the status of a non-member observer state, and before Kerry began his latest push for the renewal of peace talks.
Housing ministry spokesman Ariel Rosenberg also said there had been no tenders for new Jerusalem housing invited this year.
"Since the start of this year, there have not been any tenders in east Jerusalem but last year there were more than a thousand," he told AFP.
In recent weeks, Kerry has been pushing the sides to resume peace talks, and reports last week indicated that he has proposed that Israel freeze construction east of the 1949 armistice line so the talks can resume.
It was not clear if Netanyahu responded favorably to Kerry’s suggestion of a new construction freeze. Israel formerly froze construction for several months in an attempt to bring the PA back to the negotiating table. The PA agreed to talks shortly before the freeze ended, but refused to continue meeting when the construction ban was not renewed.
Netanyahu has reportedly put a stop to new construction in Judea and Samaria (Shomron), but has not issued a public ban on construction, and has not stopped construction for Israelis in Jerusalem.