10 May 2010 15:01:21 GMT
* Netanyahu walks political tightrope on settlement issue
* U.S. mediating indirect Israeli-Palestinian peace talks
By Jeffrey Heller
JERUSALEM, May 10 (Reuters) - Israel said on Monday it would build more homes for Jews in occupied territory in and near Jerusalem but hedged on any specific timeframe for construction that could jeopardise new peace talks with the Palestinians.
Pressed in an interview on Israeli Army Radio on construction dates for various projects around East Jerusalem, Cabinet Secretary Zvi Hauser offered only a vague reply, saying: "I guess it will happen soon. Time will tell."
A day after the formal announcement that indirect Israeli-Palestinian peace talks had begun, spokesmen for Prime Minister Benjamin Netanyahu insisted he had not bent on the contentious issue of Jewish settlement.
"Construction in Jerusalem is moving along at its usual pace," Hauser said, making no mention of a current slowdown in building in areas of the Holy City captured in the 1967 Arab-Israeli war.
The issue has irked U.S. President Barack Obama's administration, which had called for a total halt to settlement building but has since modified its position.
In remarks on Israel Radio, Netanyahu spokesman Nir Hefez said the timing and building processes of East Jerusalem projects "will be coordinated in such a way so as not to cause diplomatic embarrassment".
The comments by the two officials appeared to be an attempt to walk a political tightrope between pro-settler members of the governing coalition and Washington.
U.S. Assistant Secretary of State Philip Crowley said on Sunday that Israel and the Palestinians had taken steps to "help create an atmosphere that is conducive to successful talks".
Netanyahu had promised there would be no construction for two years at Ramat Shlomo, a settlement on West Bank land that Israel annexed after the 1967 conflict, and Palestinian President Mahmoud Abbas had pledged to work against "incitement of any sort", he said.
U.S. plans for indirect talks were stymied in March, when Israel angered Washington and the Palestinians by announcing during a visit by Vice President Joe Biden a project to build 1,600 new homes in Ramat Shlomo.
Hefez said tenders were issued in December for contractors to build 690 housing units in Har Homa, Givat Zeev and Neve Yaakov -- settlements that Israel describes as Jerusalem neighbourhoods. But he gave no starting date for construction.
Israeli officials insisted Netanyahu had not imposed a freeze in Ramat Shlomo but had made clear to the United States from the start that planning procedures meant construction would not get under way there for at least two years.
No new Israeli housing projects in East Jerusalem have been approved since March, raising speculation Netanyahu has imposed a de facto moratorium.
The disclosure on Sunday by Israel's anti-settlement Peace Now group of renovation work to turn a disused police station in East Jerusalem into apartments for settlers drew a muted response from Abbas.
Asked about the project, which does not require new building permits, Abbas told reporters: "It's up to the United States to respond to this type of thing, not us."
Abbas has made direct talks conditional on a total Israeli settlement freeze. But after receiving the endorsement of the Arab League and his Palestine Liberation Organisation, Abbas agreed to four months of U.S.-mediated indirect talks, the first peace negotiations in 18 months.
Palestinians want East Jerusalem to be the capital of the state they intend to establish in the West Bank, where Abbas holds sway, and in the Gaza Strip, an enclave controlled by Hamas Islamists opposed to the peace talks with Israel.
Citing historical and biblical links, Israel regards all of Jerusalem as its capital, a claim that is not recognised internationally. (Additional reporting by Tom Perry in Ramallah and Ori Lewis in Jerusalem)
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