Israel said today it will press forward with construction of new housing for Jews in east Jerusalem, drawing Palestinian accusations that the plans could undermine newly relaunched peace talks.

RELATIONS between Israel and the United States have hit a 35-year low, Israel’s ambassador in Washington said, amid simmering tensions between the two allies.

ISRAELI forces sealed off the West Bank and massed riot squads around Jerusalem’s Old City and Arab neighbourhoods during Muslim weekly prayers yesterday, facing down Palestinian anger over Jewish settlement expansion.

ISRAEL has confirmed plans to build 1,300 more apartments in east Jerusalem, immediately drawing the ire of Palestinians who accused it of sabotaging already rocky peace efforts.