Wednesday Israel broke ground on a new housing complex for Jews in east Jerusalem.
The groundbreaking came a day after Israel defied American, European and Palestinian demands to stop settlement activity by announcing it will press forward with construction of 900 apartments in another Jewish area in east Jerusalem.
Speaking to Fox News in Beijing on Wednesday, Obama criticized the plan to build hundreds of homes in Jerusalem's Gilo neighborhood, saying such moves make it harder to achieve peace in the region and embitter the Palestinians in a way he said could be dangerous.
The Palestinians claim the West Bank and east Jerusalem — areas captured by Israel in the 1967 Mideast war — for their hoped-for state and have refused negotiations until Israel stops settlement construction in these areas. The Palestinians say the continued growth of settlements on land they claim will make it impossible for them to establish a viable country of their own, The Associated Press reports.
It was also reported, the Obama administration's rebuke of new Jewish settlements betrays growing frustration over the Arab-Israeli stalemate as the White House gropes for a way to revive peace negotiations, analysts said Wednesday.
It was aslo reported, President Barack Obama's administration appears to have hit a brick wall 10 months after it took office with a high-profile push to restart talks that are part of his broader bid to improve ties the Arab and Muslim world.
Israel 's hawkish Prime Minister Benjamin Netanyahu has again ignored US calls to halt settlements, as the Palestinian leadership, backed by its Arab allies, demand a halt as a condition for talks but appears weaker than ever.
Obama told Fox News, after Israel decided to build hundreds of new homes in annexed Arab east Jerusalem, that such homes embitter the Palestinians and make it harder for Israel to make peace with its neighbors and ensure its security, AFP reports.
News agencies also report, Israel has offered to restrain construction on settlements in the West Bank, but has made no offers regarding construction in East Jerusalem.
Israel considers all of Jerusalem its undivided capital.
Palestinians' frustration over the stalled peace process has been rising in recent weeks. President Abbas has threatened to resign, and his government says it is pushing unilaterally for the declaration of a Palestinian state. Israeli Prime Minister Benjamin Netanyahu has warned that any such action will trigger unilateral steps from the Israeli side, Voice of America reports.