The United States Monday blasted Israel for pledging to build 1,000 more Jewish homes in Jerusalem, saying any such move would be "incompatible" with peace efforts, according to AFP

State Department spokeswoman Jen Psaki said Washington was "deeply concerned" by the reports and American embassy officials were having high-level talks with Israeli leaders to seek more information.

"We continue to make our position absolutely clear that we view settlement activity as illegitimate and unequivocally oppose unilateral steps that prejudge the future of Jerusalem," Psaki told reporters.

"Israel's leaders have said they would support a pathway to a two-state solution, but moving forward with this type of action would be incompatible with the pursuit of peace," she added.

Washington repeatedly condemns moves to build Jewish homes in Jerusalem, as well as in Judea and Samaria - despite ample evidence that both would solve a fatally deepening housing crisis in an area that's 90% unpopulated. 

But, despite the harsh condemnation, the State Department maintained that it remains Israel's staunchest ally.

"Ties between us are unshakable," Psaki reiterated. "There are times when we disagree with actions of the Israeli government,
including... the issue of settlements, where we have deep concerns about some of the steps the government is taking," she said.

"We expressed those, but it does not mean that we don't have a strong and formidable relationship that continues."

Earlier Monday, Netanyahu gave instructions for the building of about 660 homes in Ramat Shlomo, in northern Jerusalem, and about 400 more in Har Homa, in the capital's southern section.

The move was first reported Sunday on Channel 2, and is seen as a bid to strengthen the alliance with the nationalist wing of the coalition. 

Meanwhile, leftist organizations and the international community alike continue to remain quiet on the green light given for rampant illegal construction in Arab neighborhoods of Jerusalem, where there are more than 40,000 illegal housing units, in an attempt to establish facts on the ground to divide Jerusalem and establish the groundwork for a Palestinian state.